SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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 September 30, 2002

                           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 0-24353

                           THISTLE GROUP HOLDINGS, CO.
                           ---------------------------
             (Exact name of registrant as specified in its charter)

         Pennsylvania                                    23-2960768
--------------------------------------------------------------------------------
  (State or other jurisdiction of              (IRS employer identification no.)
   incorporation or organization)

         6060 Ridge Avenue, Philadelphia, Pennsylvania          19128
--------------------------------------------------------------------------------
         (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code              (215) 483-2800

                                       N/A
--------------------------------------------------------------------------------
               Former name, former address and former fiscal year,
                          if changed since last report.

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

         Yes            X                   No
                  -------------                      -------------

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date, November 14, 2002.

                  Class                                Outstanding
--------------------------------------------------------------------------------
         $.10 par value common stock                    5,244,424

<PAGE>

                  THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARIES
                                    FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2002

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                                      Page
                                                                                                                     Number
                                                                                                                     ------
<S>        <C>                                                                                                      <C>
PART I - UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF
               THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARIES

    Item 1.    Unaudited Condensed Consolidated Financial Statements and Notes Thereto.................................3

    Item 2.    Management's Discussion and Analysis of Financial
               Condition and Results of Operations....................................................................10

    Item 3.    Quantitative and Qualitative Disclosures about Market Risk.............................................14

    Item 4.    Controls and Procedures................................................................................15

PART II - OTHER INFORMATION

    Item 1.    Legal Proceedings......................................................................................16

    Item 2.    Changes in Securities..................................................................................16

    Item 3.    Defaults upon Senior Securities........................................................................16

    Item 4.    Other Information......................................................................................16

    Item 5.    Exhibits and Reports on Form 8-K.......................................................................16

SIGNATURES        ......................................................................................................

</TABLE>

<PAGE>
                  THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARIES
       UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                   September 30, 2002      December 31, 2001
                                                                                   ------------------      -----------------
<S>                                                                                  <C>                        <C>
ASSETS
Cash on hand and in banks ......................................................       $    3,654                 $   3,909
Interest-bearing deposits ......................................................           13,856                    18,814
                                                                                       ----------                 ---------
                  Total cash and cash equivalents ..............................           17,510                    22,723
Investments held to maturity
                  (approximate fair value of  $62,558)..........................               --                    63,824
Investments available for sale at fair value
                  (amortized cost of $66,369 and $16,654) ......................           67,504                    16,078
Mortgage-backed securities available for sale at fair value
                  (amortized cost of $333,240 and $295,998) ....................          341,003                   299,216
Trading securities.............................................................            11,188                    14,261
Loans receivable (net of allowance for loan losses of
                  $2,041 and $2,511) ...........................................          296,496                   259,220
Accrued interest receivable ....................................................            4,239                     4,056
FHLB stock - at cost ...........................................................            9,894                     8,844
Real estate acquired through foreclosure - net .................................            1,795                        81
Office properties and equipment - net ..........................................            6,565                     6,340
Cash surrender value of life insurance .........................................           14,740                    12,563
Excess of cost over fair value of net assets acquired ..........................            7,137                     7,680
Prepaid expenses and other assets ..............................................            5,818                     4,240
Prepaid income taxes............................................................              805                       538
Deferred income taxes ..........................................................               --                       744
                                                                                       ----------                 ---------
                  TOTAL ASSETS .................................................       $  784,694                 $ 720,408
                                                                                       ==========                 =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits .......................................................................       $  473,700                 $ 431,583
Accrued interest payable .......................................................              932                       918
Advances from borrowers for taxes and insurance ................................            1,888                     2,571
FHLB advances ..................................................................          197,884                   176,884
Payable to brokers and dealers .................................................            8,365                    14,109
Accounts payable and accrued expenses ..........................................            9,632                     7,360
Other borrowings ...............................................................            4,500                     1,000
Dividends payable ..............................................................              481                       528
Deferred income taxes...........................................................            1,168                        --
                                                                                       ----------                 ---------

                  TOTAL LIABILITIES ............................................          698,550                   634,953
                                                                                       ----------                 ---------

Company-obligated mandatorily redeemable preferred securities of a subsidiary
trust holding solely junior subordinated debentures of the Company..............           10,000                        --
                                                                                       ----------

Commitments and Contingencies

Stockholders' Equity:
Preferred stock, no par value - 10,000,000 shares authorized,
none issued in 2002 and 2001 ...................................................               --                        --
Common stock - $.10 par, 40,000,000 shares authorized, 8,999,989
issued in 2002 and 2001; 5,341,597 outstanding September 30, 2002
and 6,607,955 outstanding December 31, 2001 ....................................              900                       900
Additional paid-in capital .....................................................           92,884                    92,889
Common stock acquired by stock benefit plans ...................................           (5,748)                   (6,383)
Treasury stock at cost, 3,658,392 shares at September 30, 2002 and
2,392,034 shares at December 31, 2001 ..........................................          (38,080)                  (21,626)
Accumulated other comprehensive income..........................................            5,896                     1,286
Retained earnings - partially restricted .......................................           20,292                    18,389
                                                                                       ----------                 ---------
                  Total stockholders' equity ...................................           76,144                    85,455
                                                                                       ----------                 ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .....................................       $  784,694                 $ 720,408
                                                                                       ==========                 =========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                        3
<PAGE>

                         Thistle Group Holdings, Co. and subsidiaries
                     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                      (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     For the Three Months              For the Nine Months
                                                                      Ended September 30,              Ended September 30,
                                                                      -------------------              -------------------
                                                                      2002            2001             2002             2001
                                                                      ----            ----             ----             ----
<S>                                                            <C>            <C>               <C>               <C>
INTEREST INCOME:
   Interest on loans.....................................        $   6,419      $    4,963        $  16,791         $ 14,243
   Interest on mortgage-backed securities................            3,538           4,314           11,679           13,202
   Interest and dividends on investments.................            1,168           1,909            3,961            6,686
                                                                 ---------      ----------        ---------         --------
       Total interest income.............................           11,125          11,186           32,431           34,131
                                                                 ---------      ----------        ---------         --------

INTEREST EXPENSE:
   Interest on deposits..................................            3,376           4,318           10,262           13,687
   Interest on borrowed money............................            2,500           2,398            7,364            7,236
                                                                 ---------      ----------        ---------         --------
       Total interest expense............................            5,876           6,716           17,626           20,923
                                                                 ---------      ----------        ---------         --------

NET INTEREST INCOME                                                  5,249           4,470           14,805           13,208

PROVISION FOR LOAN LOSSES................................              150             187              500              427
                                                                 ---------      ----------        ---------         --------
NET INTEREST INCOME AFTER PROVISION
   FOR LOAN LOSSES.......................................            5,099           4,283           14,305           12,781
                                                                 ---------      ----------        ---------         --------
OTHER INCOME:
   Service charges and other fees........................              749             352            1,213              759
   Gain on sale of real estate owned.....................               --              --                6               --
   Writedown on real estate owned........................             (585)             --             (585)              --
   Gain (loss) on sale of mortgage-backed securities.....              353              (5)             708              136
   Gain (loss) on sale of loans..........................               27              --              204              (11)
   Gain (loss) on sale of investments....................                2             221             (537)             221
   Loss on SBIC investments                                             --            (125)              --             (428)
   Rental income.........................................               59              56              166              152
   Trading revenues from brokerage operations............              436             703            1,418            1,598
   Miscellaneous other income............................               --               8               --               91
                                                                 ---------      ----------        ---------         --------
       Total other income................................            1,041           1,210            2,593            2,518
                                                                 ---------      ----------        ---------         --------
OTHER EXPENSES:
   Salaries and employee benefits........................            2,383           2,066            6,312            5,745
   Occupancy and equipment...............................              705             596            2,036            1,747
   Federal insurance premium.............................               19              19               55               60
   Professional fees.....................................              151             105              548              318
   Advertising and promotion.............................               87              70              289              244
   Amortization of excess of cost over fair value
   of assets acquired....................................              180             180              540              540
   Interest on redeemable preferred securities...........              156              --              292               --
   Other.................................................              991             817            2,754            2,449
                                                                 ---------      ----------        ---------         --------
       Total other expenses..............................            4,672           3,853           12,826           11,103
                                                                 ---------      ----------        ---------         --------

INCOME BEFORE INCOME TAXES...............................            1,468           1,640            4,072            4,196
                                                                 ---------      ----------        ---------         --------

INCOME TAXES.............................................              258             372              734              807
                                                                 ---------      ----------        ---------         --------

NET INCOME...............................................        $   1,210      $    1,268        $   3,338         $  3,389
                                                                 =========      ==========        =========         ========

BASIC EARNINGS PER SHARE.................................        $     .25      $      .20        $     .59         $    .52
DILUTED EARNINGS PER SHARE...............................        $     .24      $      .20        $     .58         $    .52

WEIGHTED AVERAGE SHARES
   OUTSTANDING - BASIC...................................         4,888,078      6,308,201        5,639,952        6,458,456
WEIGHTED AVERAGE SHARES
   OUTSTANDING - DILUTED.................................         4,959,883      6,347,245        5,731,275        6,500,619

</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                       4
<PAGE>

                          THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARIES
                    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                               For the Nine Months
                                                                                               Ended September 30,
                                                                                               -------------------
                                                                                              2002               2001
                                                                                              ----               ----
<S>                                                                                     <C>                <C>
OPERATING ACTIVITIES:
Net income..................................................................               $  3,338           $  3,389
Adjustments to reconcile net income to net cash provided
by operating activities:
   Provision for loan losses................................................                    500                427
   Depreciation.............................................................                    968                767
   Amortization of stock benefit plans......................................                    678                649
   Amortization of excess of cost over fair value of net assets acquired....                    540                540
   Amortization of net premiums (discounts) on:
     Loans purchased........................................................                     73                 53
     Investments............................................................                   (471)              (790)
     Mortgage-backed securities.............................................                  3,482              1,071
   (Gain) loss on sale of loans.............................................                   (204)                11
   Gain on sale of mortgage-backed securities...............................                   (708)              (136)
   Loss (gain) on sale of investments.......................................                    537               (221)
   Writedown of real estate owned...........................................                    585                 --
   Gain on sale of real estate owned........................................                     (6)                --
   Net decrease in trading securities.......................................                  3,073              1,431
   Increase in other assets.................................................                 (4,494)            (2,697)
   (Decrease) increase in other liabilities.................................                 (3,503)                56
                                                                                           ---------           -------
Net cash provided by operating activities...................................                  4,388              4,550
                                                                                           --------            -------
INVESTING ACTIVITIES:
Principal collected on:
   Mortgage-backed securities...............................................                108,909             80,392
   Loans....................................................................                 85,763             45,073
Loans originated............................................................               (133,717)           (82,732)
Loans acquired..............................................................                   (346)                --
Purchases of:
   Investments .............................................................                 (4,762)              (103)
   Mortgage-backed securities...............................................               (194,900)          (140,913)
   Office properties and equipment..........................................                 (1,193)            (1,204)
   FHLB stock...............................................................                 (1,050)              (250)
Proceeds from the sale of mortgage-backed securities........................                 45,976             32,400
Proceeds from the sale of investments.......................................                 16,101             13,829
Proceeds from the sale of loans.............................................                  8,336              3,199
Proceeds from the sale of real estate owned.................................                     72                 --
Maturities and calls of investments.........................................                  3,195             39,632
                                                                                           --------            -------
Net cash used in investing activities.......................................                (67,616)           (10,677)
                                                                                           ---------           -------
FINANCING ACTIVITIES:
Net increase in deposits....................................................                 42,117             12,633
Net decrease in advances from borrowers for taxes and insurance.............                   (683)              (728)
Net increase in FHLB borrowings.............................................                 21,000              5,000
Net increase in other borrowings............................................                  3,500              1,250
Issuance of capital securities..............................................                 10,000                 --
Purchase of treasury stock..................................................                (16,551)            (4,286)
Net proceeds from exercise of stock options.................................                     66                 --
Cash dividends..............................................................                 (1,434)            (1,519)
                                                                                           ---------           --------
Net cash provided by financing activities...................................                 58,015             12,350
                                                                                           --------            -------
Net (decrease) increase in cash and cash equivalents........................                 (5,213)             6,223
Cash and cash equivalents, beginning of period..............................                 22,723             20,320
                                                                                           --------            -------
Cash and cash equivalents, end of period....................................               $ 17,510           $ 26,543
                                                                                           ========           ========
SUPPLEMENTAL DISCLOSURES
Interest paid on deposits and funds borrowed................................               $ 17,612           $ 20,985
Income taxes paid...........................................................                  1,345                930
Noncash transfers from loans to real estate owned...........................                  3,164                 47
Noncash transfer of investments from available for sale to held to maturity.                     --             75,446
Noncash transfer of investments from held to maturity to available for sale.                 51,385                 --
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                       5
<PAGE>

                          THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARIES
                 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                          (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1 - PRINCIPLES OF CONSOLIDATION

Thistle Group  Holdings,  Co., (the  "Company")  organized in March of 1998, has
four  wholly  owned  subsidiaries:  TGH Corp.,  TGH  Securities,  Thistle  Group
Holdings  Capital Trust I, and Roxborough  Manayunk Bank (the "Bank").  The Bank
has three wholly owned subsidiaries:  RoxDel Corp., Montgomery Service Corp. and
Ridge Service Corp. The Company's business is conducted  principally through the
Bank.  All  significant   intercompany   accounts  and  transactions  have  been
eliminated in consolidation.

NOTE 2 - BASIS OF PRESENTATION

The accompanying  unaudited  condensed  consolidated  financial  statements were
prepared in accordance with  instructions for Form 10-Q and,  therefore,  do not
include all  information  necessary for a complete  presentation of consolidated
financial  condition,  results of operations,  and cash flows in conformity with
accounting  principles  generally  accepted  in the  United  States of  America.
However, all adjustments, consisting of normal recurring accruals, which, in the
opinion of management, are necessary for a fair presentation of the consolidated
financial  statements,  have been  included.  The results of operations  for the
three and  nine-month  periods  ended  September  30,  2002 are not  necessarily
indicative  of the results  which may be expected for the entire  fiscal year or
any other future interim period.

These unaudited condensed  consolidated  financial  statements should be read in
conjunction with the consolidated  financial statements and related notes, which
are included in the Company's Annual Report to stockholders on Form 10-K for the
year ended December 31, 2001.

NOTE 3 - INVESTMENTS

Investments held to maturity at December 31, 2001 consisted of the following:


                                                           December 31, 2001
                                                        Amortized    Approximate
                                                          Cost       Fair Value
                                                          ----       ----------

FHLB and FHLMC bonds - more than 10 years..........    $  15,201    $   14,408
Municipal bonds - 5 to 10 years....................          777           789
Municipal bonds - more than 10 years...............       47,846        47,361
                                                       ---------    ----------

Total..............................................    $  63,824    $   62,558
                                                       =========    ==========

During the three months  ended June 30,  2002,  the Company sold $15,600 of FHLB
and FHLMC  bonds,  representing  its  entire  portfolio  of zero  coupon  agency
securities,  previously  classified as held to maturity,  at a net loss of $709.
The  Company  executed  the  transaction  to  improve  the  interest-rate   risk
characteristics of the Bank's balance sheet. As a result of this transaction the
Company was required to reclassify  $51,385 of held to maturity  investments  to
available for sale.

Investments  available  for sale at  September  30, 2002 and  December  31, 2001
consisted of the following:

<TABLE>
<CAPTION>
                                                 September 30, 2002          December 31, 2001
                                             Amortized    Approximate       Amortized    Approximate
                                               Cost       Fair Value          Cost       Fair Value
                                               ----       ----------          ----       ----------

<S>                                       <C>          <C>               <C>          <C>
Municipal bonds - 5 to 10 years.........    $     677    $      713        $      --    $       --
Municipal bonds - more than 10 years....       50,012        51,104               --            --
Mutual funds............................        1,565         1,565            1,530         1,530
Capital trust securities................        8,555         7,680            9,077         8,040
Equity investments......................        4,025         4,907            4,528         4,989
Other...................................        1,535         1,535            1,519         1,519
                                            ---------    ----------        ---------    ----------

Total...................................    $  66,369    $   67,504        $  16,654    $   16,078
                                            =========    ==========        =========    ==========
</TABLE>

                                       6
<PAGE>

NOTE 4 - MORTGAGE-BACKED SECURITIES AVAILABLE FOR SALE

Mortgage-backed securities at September 30, 2002 and December 31, 2001 consisted
of the following:

<TABLE>
<CAPTION>
                                                            September 30, 2002                      December 31, 2001
                                                        Amortized          Approximate         Amortized          Approximate
                                                          Cost             Fair Value            Cost             Fair Value
                                                          ----             ----------            ----             ----------

<S>                                                  <C>                <C>                 <C>                <C>
Agency pass-through certificates.....................  $ 281,212          $  288,649          $ 287,503          $  290,539
Agency collateralized mortgage obligations...........      2,958               3,014              3,904               3,904
Agency real estate mortgage investment conduits......     20,497              20,766              4,591               4,773
Non-agency collateralized mortgage obligations.......     28,573              28,574                 --                  --
                                                       ---------          ----------          ---------          ----------
Total................................................  $ 333,240          $  341,003          $ 295,998          $  299,216
                                                       =========          ==========          =========          ==========
</TABLE>

NOTE 5 - TRADING SECURITIES

Trading  securities  are  securities  owned by TGH  Securities,  a wholly  owned
broker/dealer  subsidiary of the Company.  Trading  securities are recorded on a
trade  date basis and are  carried at fair  value.  These  securities  generally
consist of short-term municipal notes and bonds. Gains and losses, both realized
and unrealized, are included in operating income.

NOTE 6 - LOANS RECEIVABLE

Loans  receivable at September  30, 2002 and December 31, 2001  consisted of the
following:

<TABLE>
<CAPTION>
                                                              September 30, 2002         December 31, 2001
                                                              ------------------         -----------------
<S>                                                             <C>                        <C>
Mortgage loans:
         1 - 4 family residential.............................    $  126,692                 $  125,504
         Commercial real estate...............................        91,579                     62,532
Home equity lines of credit and improvement loans.............        29,069                     20,923
Commercial non-mortgage loans.................................        23,386                     28,866
Construction loans - net......................................        27,524                     23,677
Loans on savings accounts.....................................           634                        637
Consumer loans    ............................................         1,083                        879
                                                                  ----------                 ----------

         Total loans..........................................       299,967                    263,018
                                                                  ----------                 ----------
Plus: unamortized premiums....................................           192                        267
Less:
         Net discounts on loans purchased.....................           (12)                       (13)
         Deferred loan fees...................................        (1,610)                    (1,541)
         Allowance for loan losses............................        (2,041)                    (2,511)
                                                                  ----------                 ----------
Total                                                             $  296,496                 $  259,220
                                                                  ==========                 ==========
</TABLE>

Loan losses at September 30, 2002 and December 31, 2001 were as follows:

<TABLE>
<CAPTION>
                                                              September 30, 2002         December 31, 2001
                                                              ------------------         -----------------
<S>                                                               <C>                        <C>
Balance, beginning............................................    $    2,511                 $    1,682
Provision.....................................................           500                        847
Charge-offs...................................................          (970)                       (18)
                                                                  -----------                -----------
Balance ending................................................    $    2,041                 $    2,511
                                                                  ==========                 ==========
</TABLE>

NOTE 7 - DEPOSITS

The major types of deposits by amounts and percentages were as follows:

<TABLE>
<CAPTION>
                                         September 30, 2002                  December 31, 2001
                                       Amount          % of Total         Amount          % of Total
                                       ------          ----------         ------          ----------
<S>                             <C>                   <C>          <C>                    <C>
NOW accounts and
   transaction checking            $   79,476            16.8%        $   47,372             11.0%
Money Market Demand accounts           45,204             9.5%            40,029              9.3%
Passbook accounts                     123,696            26.1%           109,257             25.3%
Certificate accounts                  225,324            47.6%           234,925             54.4%
                                   ----------           ------        ----------            ------

Total                              $  473,700           100.0%        $  431,583            100.0%
                                   ==========           ======        ==========            ======
</TABLE>

                                       7
<PAGE>

NOTE 8 - EARNINGS PER SHARE

         Basic earnings per share excludes  dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares  outstanding  for the period.  Diluted  earnings  per share  reflects the
potential  dilution that could occur if  securities or other  contracts to issue
common stock were  exercised  or converted  into common stock or resulted in the
issuance of common stock that then shared in the  earnings of the  Company.  The
weighted  average  shares  used in the  basic  and  diluted  earnings  per share
computations  for the three and nine-month  periods ended September 30, 2002 and
2001 are as follows:

<TABLE>
<CAPTION>
                                                               For the                           For the
                                                         Three Months Ended                 Nine Months Ended
                                                            September 30,                     September 30,
                                                            ------------                      ------------
                                                        2002            2001              2002           2001
                                                        ----            ----              ----           ----

<S>                                                <C>            <C>                <C>           <C>
Average common shares outstanding- basic              4,888,078      6,308,201          5,639,952     6,458,456
Increase in shares due to dilutive options               71,805         39,044             91,323        42,163
                                                    -----------    -----------        -----------   -----------
Adjusted shares outstanding - diluted                 4,959,883      6,347,245          5,731,275     6,500,619
                                                    ===========    ===========        ===========   ===========
</TABLE>

NOTE 9 - COMPREHENSIVE INCOME

For the three and  nine-month  periods  ended  September  30, 2002,  the Company
reported  total  comprehensive   income  of  approximately  $2,781  and  $7,948,
respectively.  For the three and  nine-month  periods  of the  prior  year,  the
Company reported total comprehensive  income of approximately $4,400 and $10,200
respectively.  Items of other comprehensive income consisted of unrealized gains
or (losses), net of taxes, on available for sale securities and reclassification
adjustments for gains or (losses) included in net income.

NOTE 10 - DIVIDENDS

On September 19, 2002, the Company declared a dividend of $.09 per share payable
October 15, 2002 to stockholders of record on September 30, 2002.

NOTE 11 - RECENT ACCOUNTING STANDARDS

In June 2001, the Financial  Accounting  Standards Board ("FASB") issued two new
pronouncements:  SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill
and Other Intangible  Assets.  SFAS No. 141 is effective as follows:  (a) use of
the pooling-of-interest method is prohibited for business combinations initiated
after June 30, 2001;  and (b) the  provisions  of SFAS No. 141 also apply to all
business  combinations  accounted for by the purchase  method that are completed
after June 30, 2001.  SFAS No. 142 is effective for fiscal years beginning after
December 15, 2001 to all goodwill and other intangible  assets  recognized in an
entity's statement of financial position at that date,  regardless of when those
assets  were  initially  recognized.  However,  SFAS No.  142 did not change the
accounting   prescribed   for  certain   acquisitions   by  banking  and  thrift
institutions,  resulting  in continued  amortization  of the excess of cost over
fair value of net assets  acquired  under SFAS No. 72,  Accounting  for  Certain
Acquisitions of Banking or Thrift Institutions. In October 2002, the FASB issued
SFAS No. 147,  Acquisitions of Certain  Financial  Institutions,  which provides
guidance on the accounting for the acquisition of a financial institution.  This
statement requires that the excess of the fair value of liabilities assumed over
the fair value of tangible  and  identifiable  intangible  assets  acquired in a
business combination represents goodwill that should be accounted for under SFAS
No. 142, Goodwill and Other Intangible Assets. Thus, the specialized  accounting
guidance in paragraph 5 of SFAS No. 72,  Accounting for Certain  Acquisitions of
Banking or Thrift  Institutions,  will not apply after  September  30, 2002.  If
certain  criteria  in SFAS No.  147 are met,  the  amount of the  unidentifiable
intangible  asset  will  be  reclassified  to  goodwill  upon  adoption  of  the
statement.  Financial  institutions  meeting conditions outlined in SFAS No. 147
will  be   required  to  restate   previously   issued   financial   statements.
Additionally,  the  scope of SFAS No.  144,  Accounting  for the  Impairment  or
Disposal   of   Long-Lived    Assets,    is   amended   to   include   long-term
customer-relationship    intangible    assets    such    as    depositor-    and
borrower-relationship intangible assets and credit cardholder intangible assets.
This  statement  is effective  for the Company  beginning  October 1, 2002.  The
Company  is  reviewing  its  prior  branch  acquisitions  against  the  criteria
established in SFAS No. 147 and has not made a final determination of the amount
the excess of cost over fair value of net assets  acquired  ($7,137 at September
30, 2002) that will be reclassified  to goodwill.  For the three and nine months
ended September 30, 2002, the Company amortized $180 and $540, respectively.


In April 2002, the FASB issued SFAS No. 145,  Rescission of FASB  Statements No.
4, 44, and 64,  Amendment of FASB  Statement No. 13, and Technical  Corrections.
The  provisions of this  statement  related to the  rescission of SFAS No. 4 are
effective  for fiscal years  beginning  after May 15, 2002.  Management  has not
determined the impact of applying these  provisions.  Certain  provisions of the
statement relating to SFAS No. 13 are effective for transactions occurring after
May 15, 2002. All other  provisions of the statement are effective for financial
statements  issued on or after May 15, 2002.  These  provisions had no impact on
the Company's financial statements.

                                       8
<PAGE>

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities.  The standard requires companies to recognize costs
associated  with exit or disposal  activities when they are incurred rather than
at the date of a  commitment  to an exit or  disposal  plan.  Examples  of costs
covered by the standard  include lease  termination  costs and certain  employee
severance  costs  that  are  associated  with  a   restructuring,   discontinued
operation, plant closing, or other exit or disposal activity. SFAS No. 146 is to
be applied prospectively to exit or disposal activities initiated after December
31, 2002.


NOTE 12 - CAPITAL SECURITIES

On March 26, 2002, the Company formed a wholly-owned  subsidiary,  Thistle Group
Holdings Capital Trust I, a Delaware business trust (the "Trust").  On April 10,
2002,  the Trust sold $10.0 million of pooled  floating rate capital  securities
(the "Capital  Securities")  to MM Community  Funding III, Ltd., an unaffiliated
entity, with a stated value and liquidation  preference of $1,000 per share. The
obligations   of  the  Trust  under  the  Capital   Securities   are  fully  and
unconditionally  guaranteed  by the  Company  and the Trust  has no  independent
operations.  The entire  proceeds from the sale of the Capital  Securities  were
used by the Trust to invest in floating rate junior subordinated debt securities
of the Company (the "Junior Subordinated Debt"). The Junior Subordinated Debt is
unsecured  and  ranks  subordinate  and  junior  in  right  of  payment  to  all
indebtedness,   liabilities   and   obligations  of  the  Company.   The  Junior
Subordinated  Debt is the  sole  asset of the  Trust.  Interest  on the  Capital
Securities  is  cumulative  and payable  semi-annually  in arrears.  The Capital
Securities  mature in April 2032. The Company has the right to optionally redeem
the Junior Subordinated Debt prior to the maturity date, but no sooner than five
years after the issuance, at 100% of the stated liquidation amount, plus accrued
and unpaid distributions, if any, on the redemption date. Upon the occurrence of
certain events, the Company has the right to redeem the Junior Subordinated Debt
in whole, but not in part, at a special  redemption price before five years have
elapsed. Proceeds from any redemption of the Junior Subordinated Debt will cause
a mandatory  redemption of Capital  Securities  having an aggregate  liquidation
amount equal to the principal amount of the Junior  Subordinated  Debt redeemed.
Additionally,  under the terms of the Junior Subordinated Debt, the Company will
have the right,  with certain  limitations,  to defer the payment of interest on
the  Junior  Subordinated  Debt at any time for a period  not  exceeding  twenty
consecutive  quarterly  periods.  Consequently,  distributions  on  the  Capital
Securities would be deferred and accumulate interest,  compounded quarterly. The
Capital Securities were issued without  registration under the Securities Act of
1933, as amended, in reliance upon an exemption from registration as provided by
Regulation S. At September 30, 2002, the interest rate on the capital securities
and junior subordinated debt was 6.02%.

NOTE 13 - TENDER OFFER

During the quarter ended June 30, 2002, the Company  completed its Issuer Tender
Offer ("ITO"), repurchasing 1,129,000 shares at a price of $13.00 per share. The
Company's ITO expired at midnight on the evening of June 20, 2002.

NOTE 14- SUBSEQUENT EVENT

Subsequent to September 30, 2002,  the Company  executed a Standstill  Agreement
with Jewelcor  Management,  Inc.,  Seymour  Holtzman,  James A.  Mitarotonda and
Barington Companies Equity Partners, L.P. (the "Group Members").  Such agreement
will  remain  effective  for a period of five years.  The  primary  terms of the
agreement include the following.  The Company will make a cash payment of $75 to
the Group Members.  The Group Members will withdraw and release the two lawsuits
pending in the Court of Common Pleas,  Philadelphia,  Pennsylvania,  against the
Company and each of its directors. Additionally, each Group Member has agreed to
enter into this agreement and to refrain from purchasing or otherwise  acquiring
the  beneficial  ownership  of any shares of capital  stock of the Company for a
period of five years.  The Company has also agreed to  repurchase  approximately
97,000 shares of its common stock held by Group Members at $12.50 per share.  In
connection  with the  agreement  and  repurchase  of shares,  the  Company  will
recognize a charge of $116 net of tax in the fourth quarter of 2002.

                                       9
<PAGE>

                  THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The  Private  Securities  Litigation  Reform Act of 1995  contains  safe  harbor
provisions regarding forward-looking  statements.  When used in this discussion,
the words  "believes",  "anticipates",  "contemplates",  "expects",  and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties, which could cause actual results
to differ materially from those projected. Those risks and uncertainties include
changes in interest  rates,  risks  associated  with the effect of opening a new
branch,  the  ability  to  control  costs  and  expenses,  new  legislation  and
regulations and general market conditions.

Set forth below is the  Company's  earnings  information  for the quarter  ended
September 30, 2002 as compared to the quarter ended June 30, 2002.  (the "Linked
Quarter Highlights")

                                                       LINKED QUARTER HIGHLIGHTS
                                                         (Dollars in Thousands)
<TABLE>
<CAPTION>

     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
                                             QTR               QTR                INCREASE           % INCREASE
                                           9/30/02           6/30/02             (DECREASE)           (DECREASE)
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
<S>                                   <C>                <C>                 <C>                       <C>
     Interest Income                    $   11,125         $  10,778           $     347                 3.2%
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Interest Expense                        5,876             5,920                 (44)                (.7%)
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Net Interest Income                     5,249             4,858                 391                 8.0%
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Provision for loan losses                 150               200                 (50)              (25.0%)
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Non-interest Income                     1,041               949                  92                 9.7%
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Non-interest Expense                    4,672             4,193                 479                11.4%
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Net Income                              1,210             1,135                  75                 6.6%
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Loans                                 296,496           291,795               4,701                 1.6%
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Deposits                              473,700           466,258               7,442                 1.6%
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
     Stockholders' Equity                   76,144            73,936               2,208                 3.0%
     -------------------------------- ---------------- ----------------- ---------------------- ----------------------
</TABLE>

o    Interest  income for the  current  quarter  ended  increased  $347,000  due
     primarily to $1 million of additional  loan interest  income related to the
     payoff of a $5.7 million  commercial  loan.  Such  additional loan interest
     income was offset by a decrease of $704,000  in interest  income  earned on
     the Company's investment portfolio. Since June of 2002, the mortgage-backed
     securities  portfolio  has  generated  a high  level  of  prepayments  thus
     reducing  the average  life of such  portfolio.  Because of the current low
     interest  rate  environment,   such  cash  flows  from  prepayment  of  the
     mortgage-backed  securities  portfolio  have been and will  continue  to be
     invested  in  a  mix  of  adjustable  rate  and  shorter  term  fixed  rate
     securities.  Such  investments  at  current  market  rates  will  lower the
     portfolio yield, however, these investments will continue to produce future
     cash flows to be reinvested in varying interest rate environments.

o    Non-interest  income for the quarter increased  $92,000.  Such increase was
     the result of the following increases and decreases:

     -    Service charges and other fees increased $533,000 due primarily to the
          recognition  of a  $460,000  fee on the  payoff  of the  $5.7  million
          commercial loan discussed  above.

     -    TGH  Securities'  trading  revenues  decreased  $247,000  due  to  the
          seasonal  nature of the municipal  securities  business.  Salaries and
          employee  benefits  for TGH  Securities  are  directly  related to its
          trading revenues.

     -    The Company recorded a writedown of $585,000 on real estate owned. The
          property was foreclosed on in the prior quarter and is currently being
          marketed  for  sale.  Such  writedown  is  reflective  of the  current
          disposition value of this asset.

     -    Gains  on the  sale of  mortgage-backed  securities  for  the  current
          quarter totaled $353,000.

o    Non-interest  expense  increased  $479,000 in the current quarter primarily
     due to a $289,000  writedown  of the cash  surrender  value of certain life
     insurance  policies,  reflecting  the continued  downward  trend  exhibited
     throughout the equities markets during the third quarter. Such writedown is
     included in salaries and employee benefits.

o    Loans  receivable  increased $4.7 million for the current  quarter  despite
     heavy  prepayments.  Originations  of $50 million for the quarter more than
     offset sales and repayments of $45 million.

o    Deposits increased $7.4 million for the quarter.  Core deposits  (checking,
     money  market,   and  passbook)   increased   $16.2  million  or  7%  while
     certificates of deposit decreased by $8.8 million or 4%.

                                       10
<PAGE>
Comparison of Financial Condition at September 30, 2002 from December 31, 2001
------------------------------------------------------------------------------

Total assets were $784.7 million at September 30, 2002, representing an increase
of $64.3  million from the balance of $720.4  million at December 31, 2001.  The
increase  was due to an  increase  of $37  million in loans  receivable  and $29
million in  investments  which were  funded by an  increase  in  deposits of $42
million and additional FHLB borrowings of $21 million.

Investments  held to  maturity  decreased  $63.8  million due  primarily  to the
transfer of $51.4 million of municipal  bonds to available for sale, the sale of
certain agency  securities of $14.9 million and calls of municipal bonds of $2.0
million, offset by purchases of $4.7 million.

Investments  available for sale  increased  $51.4  million  primarily due to the
transfer of $51.4 million of municipal  bonds from held to maturity to available
for sale.

Mortgage-backed  securities  increased  $41.8 million mainly due to purchases of
$194.9  million  offset  by  repayments  of  $108.9  million  and sales of $46.0
million.

Loans  receivable  increased  $37.3  million,  or 14.4%,  to $296.5  million  at
September 30, 2002 from $259.2  million at December 31, 2001.  This increase was
primarily the result of $133.7 million of loan originations, offset by principal
repayments of $85.8 million and sale of loans of $8.3 million.

Deposits  increased  $42.1 million,  or 9.8%, to $473.7 million at September 30,
2002 from  $431.6  million at  December  31,  2001.  NOW  accounts,  transaction
checking and money market accounts  increased $37.3 million;  passbook  accounts
increased $14.4 million, and certificates decreased $9.6 million.

FHLB  advances  increased  21.0 million to $197.9  million at September 30, 2002
from $176.9  million at December 31, 2001.  The increase was the result of $16.0
million in overnight  borrowings and $5.0 million in one-year  borrowing used to
fund purchases of mortgage-backed securities.

Total stockholders'  equity decreased $9.3 million to $76.1 million at September
30, 2002 from $85.4 million at December 31, 2001 primarily due to treasury stock
purchases from the Company's  issuer tender offer of $14.7 million,  other stock
purchases of $1.7  million and  dividends  paid of $1.4  million  offset by an a
increase in the  accumulated  other  comprehensive  income of $4.6  million as a
result  of  changes  in the  net  unrealized  gain  on the  available  for  sale
securities portfolio due to fluctuations in the interest rates and net income of
$3.3 million.  Because of interest rate changes, the Company's accumulated other
comprehensive income (loss) may fluctuate for each interim and year-end period.

Non-performing Assets
---------------------

The following table sets forth information  regarding  non-performing  loans and
real estate owned.

<TABLE>
<CAPTION>
                                                       At                              At
                                               September 30, 2002             December 31, 2001
                                               ------------------             -----------------
                                                            (Dollars in Thousands)

<S>                                              <C>                              <C>
Total non-performing loans........................  $    102                         $  3,178
Real estate owned.................................     1,795                               81
                                                    --------                         --------

Total non-performing assets.......................  $  1,897                         $  3,259
                                                    ========                         ========

Total non-performing loans to
total loans.......................................       .03%                            1.23%

Total non-performing assets to
total assets......................................       .24%                             .45%

Allowance for loan loss...........................  $  2,041                         $  2,511

Allowance for loan losses as a percentage
of total non-performing assets....................       108%                              77%

Allowance for loan losses as a percentage
of total non-performing loans.....................      2001%                              79%

Allowance for loan losses as a percentage
of total average loans............................       .72%                            1.05%
</TABLE>

The decrease in  non-performing  loans from  December 31, 2001 to September  30,
2002 is primarily due to one commercial  real estate loan,  which was foreclosed
on in the prior quarter and is currently being marketed for sale.

                                       11
<PAGE>

Comparison of Operations  for the Three and Nine-Month  Periods Ended  September
30, 2002 and 2001
--------------------------------------------------------------------------------

Net income for the quarter  ended  September  30, 2002 was $1.2  million or $.24
diluted  earnings  per share as compared  to net income of $1.3  million or $.20
diluted  earnings per share for the quarter ended September 30, 2001. Net income
for the nine months  ended  September  30, 2002 was $3.3 million or $.58 diluted
earnings  per share as compared to $3.4  million or $.52  earnings per share for
the nine months ended September 30, 2001.

Net interest income for the quarter ended September 30, 2002 increased  $779,000
or 17.4 % over the quarter ended September 30, 2001. Net interest income for the
nine months ended  September 30, 2002  increased  $1.6 million or 12.1% over the
nine months ended September 30, 2001.

Interest income for the quarter ended September 30, 2002 decreased  $61,000 over
the quarter ended September 30, 2001, primarily due to a decrease in the average
yield of 72 basis  points,  partially  offset by an increase of $74.0 million in
the average balance of interest-earning  assets. Excluding the additional income
earned on the $5.7 million  commercial  loan that was repaid during the quarter,
the average yield would have  decreased 125 basis points.  Interest  expense for
the quarter ended  September 30, 2002 decreased  $840,000 over the quarter ended
September  30, 2001 due to a decrease  in the average  cost of funds of 96 basis
points,   partially   offset  by  an  increase   in  the   average   balance  of
interest-bearing liabilities of $67.0 million.

Interest  income for the nine months ended  September  30, 2002  decreased  $1.7
million  over the nine  months  ended  September  30,  2001  primarily  due to a
decrease in the average yield of 86 basis points partially offset by an increase
of $56.4 million in the average balance of  interest-earning  assets.  Excluding
the additional  income earned on the commercial loan discussed above the average
yield  would have  decreased  104 basis  points.  Interest  expense for the nine
months  ended  September  30, 2002  decreased  $3.3 million over the nine months
ended September 30, 2001. The decrease in interest  expense is due to a decrease
in the average cost of funds of 108 basis points partially offset by an increase
in the average balance of interest-bearing liabilities of $54.1 million.

The Company  continues to collect low cost  deposits and  originate  loans.  Two
components of the Company's  balance sheet,  in this interest rate  environment,
continue to put pressure on margins. The majority of the Company's FHLB advances
are priced  well above  current  market  rates and have  approximately  a 6 year
average life.  The option to call or reprice these advances rests with the FHLB.
In  addition,  as  discussed  herein,  the mortgage  securities  portfolio  will
continue to generate cash flows that will be repriced at current  market levels.
Collectively, these two components will continue to hinder the Company's ability
to  increase  earnings.   However,  management  believes,  though  there  is  no
assurance,  that the continued  execution of the Company's  business plan,  core
deposit and loan growth, will mitigate the effect of lower investment returns.

Non-interest  income for the quarter ended September 30, 2002 decreased $169,000
over the quarter ended September 30, 2001. See the "Linked  Quarter  Highlights"
discussion.

Non-interest  income for the nine months  ended  September  30,  2002  increased
$75,000 over the nine months ended  September  30, 2001.  This  increase was the
result of the following:

     -    Service charges and other fees increased $454,000.

     -    A writedown  of $585,000  was  recorded in the current  period on real
          estate owned.

     -    Trading revenues decreased $180,000.

     -    The prior year  period  contained  a $428,000  loss on a  subsidiary's
          investment in small business investment companies.

Non-interest  expense for the quarter and nine months ended  September  30, 2002
increased  $819,000 and $1.7 million,  respectively,  over the comparative  2001
periods.

     -    Salaries  and  employee  benefits  increased  $317,000  and  $567,000,
          respectively, over the same periods of the prior year. The majority of
          the increase for the quarter was the result of a $289,000 writedown in
          the third quarter of 2002 of the cash surrender  value of certain life
          insurance  policies.  The  increase  for the nine months is due to the
          above mentioned  writedown,  the addition of personnel in lending, the
          opening of two new banking offices and normal salary increases.

     -    Occupancy  and  equipment  costs  increased   $109,000  and  $289,000,
          respectively,  over the same periods of the prior year.  The increases
          were due to depreciation  expense in connection with the completion of
          the  installation  of a new  enterprise-wide  telephone  system in the
          first  quarter of 2002 as well as additional  equipment  purchases and
          related expenses for two new banking offices.

                                       12
<PAGE>

     -    Professional  fees increased  $46,000 for the quarter ended  September
          30, 2002 versus the prior year period and  increased  $230,000 for the
          nine months ended September 30, 2002 versus the prior year period. The
          increase for the quarter was due to additional fees related to ongoing
          litigation.  The  increase  for the  nine-month  period was  primarily
          related to fees  incurred in connection  with the Company's  contested
          Annual Meeting held in April 2002.

     -    Interest on redeemable preferred securities was $156,000 and $292,000,
          respectively, for the three and nine-month periods of the current year
          due to the issuance of $10 million of capital  trust  certificates  in
          April 2002.

     -    Other expenses increased $174,000 and $305,000, respectively, over the
          same  periods of the prior  year.  The  increase  for the  three-month
          period was due to increases in  telephone  expenses,  Office of Thrift
          Supervision  assessment fees and transfer agent expenses. The increase
          for the  nine-month  period was due to  increases  in  payroll  taxes,
          telephone  expenses,  and  to  other  printing  and  mailing  expenses
          resulting from the Company's contested Annual Meeting.

Critical Accounting Policies
----------------------------

In  Management's  opinion,  the most critical  accounting  policy  impacting the
Company's  financial  statements  is the  evaluation  of the  allowance for loan
losses.  Management  carefully monitors the credit quality of the loan portfolio
and makes estimates about the amount of credit losses that have been incurred at
each financial statement date. Management evaluates the fair value of collateral
supporting the impaired loans using independent appraisals and other measures of
fair value.  This process involves  subjective  judgments and assumptions and is
subject  to change  based on  factors  that may be  outside  the  control of the
Company.

Liquidity and Capital Resources
-------------------------------

On  September  30,  2002 the Bank was in  compliance  with its three  regulatory
capital requirements as follows:

                                               Amount                    Percent
                                               ------                    -------
                                                   (Dollars in Thousands)
Tangible capital........................     $  53,717                    7.24%
Tangible capital requirement............        11,127                    1.50%
                                             ---------                  -------
Excess over requirement.................     $  42,590                    5.74%
                                             =========                  =======

Core capital............................     $  53,717                    7.24%
Core capital requirement................        29,676                    4.00%
                                             ---------                  -------
Excess over requirement.................     $  24,041                    3.24%
                                             =========                  =======

Risk based capital......................     $  55,758                   15.64%
Risk based capital requirement..........        28,529                    8.00%
                                             ---------                  -------
Excess over requirement.................     $  27,229                    7.64%
                                             =========                  =======

The Company's  primary sources of funds are deposits,  borrowings,  and proceeds
from principal and interest  payments on loans,  mortgage-backed  securities and
other  investments.  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 general interest rates,  economic
conditions,  competition  and the  consolidation  of the  financial  institution
industry.

The primary  investment  activity of the Company is the origination and purchase
of mortgage loans, mortgage-backed securities and other investments.  During the
nine months ended September 30, 2002, the Company  originated  $133.7 million of
loans. The Company also purchases loans and mortgage-backed securities to reduce
liquidity   not  otherwise   required  for  local  loan  demand.   Purchases  of
mortgage-backed  securities  totaled $194.9 million during the nine-month period
ended September 30, 2002. Other investment activities include investment in U.S.
government  and federal agency  obligations,  municipal  bonds,  debt and equity
investments in financial  services firms, FHLB of Pittsburgh  stock,  commercial
and consumer loans.

The Company's  most liquid assets are cash and cash  equivalents,  which include
investments in highly liquid, short-term investments.  The level of these assets
is dependent on the Company's  operating,  financing  and  investing  activities
during any given  period.  At  September  30,  2002,  cash and cash  equivalents
totaled $17.5 million.  The Bank's  liquidity  ratio was 4.07 % at September 30,
2002.

The Company anticipates that it will have sufficient funds available to meet its
current commitments.  As of September 30, 2002, the Company had $26.2 million in
commitments  to fund loans.  Certificates  of deposit,  which were  scheduled to
mature in one year or less,  as of September  30, 2002 totaled  $141.3  million.
Management believes that a significant portion of such deposits will remain with
the Company.

                                       13
<PAGE>

Additional Key Operating Information and Ratios
-----------------------------------------------
<TABLE>
<CAPTION>
                                                                    For the                         For the
                                                              Three Months Ended               Nine Months Ended
                                                                 September 30,                   September 30,
                                                                 ------------                    ------------
                                                            2002(1)      2001(1)              2002(1)       2001(1)

<S>                                                       <C>         <C>                   <C>          <C>
Return on average assets                                      .63%        .71%                  .61%         .76%
Return on average equity                                     6.39%       5.79%                 5.46%        5.19%
Yield on average interest-earning assets                     6.26%       6.98%                 6.27%        7.13%
Cost of average interest-bearing liabilities                 3.55%       4.51%                 3.65%        4.72%
Interest rate spread (2)                                     2.71%       2.47%                 2.63%        2.41%
Net interest margin                                          3.07%       2.93%                 2.99%        2.91%
</TABLE>

<TABLE>
<CAPTION>
                                                             At September 30, 2002              At December 31, 2001
                                                             ---------------------              --------------------
<S>                                                               <C>                                <C>
Tangible book value per share                                       $12.92                             $11.77
</TABLE>

(1)  The ratios for the three and  nine-month  periods are annualized and yields
     were adjusted for the effects of tax-free  investments  using the statutory
     tax rate.

(2)  Interest rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.

Quantitative and Qualitative Disclosures about Market Risk
----------------------------------------------------------

Qualitative  Analysis.  There have been no material changes from the Qualitative
Analysis  information  regarding  market risk  disclosed  under the heading "Net
Portfolio  Value" in the  Company's  Management's  Discussion  and  Analysis  of
Financial  Condition and Results of Operations  included in the annual report on
Form 10-K for the year ended December 31, 2001.

Quantitative  Analysis.  Exposure to interest rate risk is actively monitored by
management.  The  Company's  objective  is to  maintain  a  consistent  level of
profitability  within  acceptable  risk  tolerances  across  a  broad  range  of
potential  interest  rate  environments.  The Company uses the OTS Net Portfolio
Value  ("NPV")  Model to monitor  its  exposure  to  interest  rate risk,  which
calculates  changes in net portfolio value.  Reports  generated from assumptions
provided  and  modified  by  management  are  reviewed  by  the  Asset/Liability
Management  Committee  and  reported to the Board of  Directors  quarterly.  The
Interest Rate  Sensitivity of the Net Portfolio Value Report shows the degree to
which balance sheet line items and net portfolio value are potentially  affected
by a 100 to 300 basis point (1 basis point equals 1/100th of a percentage point)
upward and downward parallel shift (shock) in the Treasury yield curve.

Since the NPV  Model  measures  exposure  to  interest  rate risk of the Bank to
assure capital  adequacy for the protection of the  depositors,  only the Bank's
financial  information is used for the model.  However,  the Bank is the primary
subsidiary  and most  significant  asset of the Company,  therefore  the OTS NPV
model provides a reliable basis upon which to perform the quantitative analysis.
The following  table  presents the Bank's NPV as of September 30, 2002.  The NPV
was calculated by the OTS, based on information provided by the Bank.

<TABLE>
<CAPTION>
                                                                                      Net Portfolio Value
                                    Net Portfolio Value                                 As a % of Assets
                                    -------------------                                 ----------------
Change in Rates                                                               Net Portfolio
In Basis Points    Dollar Amount       Dollar Change         % Change          Value Ratio      Basis Point Change
---------------    -------------       -------------         --------          -----------      ------------------
<S>               <C>                 <C>                     <C>              <C>                  <C>
     300            $   31,442          $  (28,420)             (47) %           4.31 %               (334)
     200                46,230             (13,632)             (23) %           6.16 %               (150)
     100                56,259              (3,603)              (6) %           7.32 %                (34)
       0                59,862                  --               --              7.66 %                 --
    (100)               55,052              (4,810)              (8) %           6.98 %                (68)
    (200)                    *                   *                   *                *                   *
    (300)                    *                   *                   *                *                   *

</TABLE>

     * Scenario not used due to the low prevailing interest rate environment

                                       14
<PAGE>

Controls and Procedures
-----------------------

         (a) Evaluation of disclosure  controls and  procedures.  Based on their
             --------------------------------------------------
evaluation  as of a date  within 90 days of the  filing  date of this  Quarterly
Report on Form 10-Q, the Registrant's  principal executive officer and principal
financial officer have concluded that the Registrant's  disclosure  controls and
procedures  (as defined in Rules  13a-14(c) and 15d-14(c)  under the  Securities
Exchange  Act of 1934  (the  "Exchange  Act"))  are  effective  to  ensure  that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded,  processed,  summarized and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and forms.

         (b) Changes in internal controls.  There were no significant changes in
             ----------------------------
the Registrant's  internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,  including any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.

                                       15

<PAGE>

                  THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARIES
                                     PART II

ITEM 1.    LEGAL PROCEEDINGS

On or about October 17, 2002 Jewelcor Management, Inc. released and withdrew its
two legal proceedings against the Company and each of its directors.  See "Notes
to Unaudited Condensed  Consolidated Financial Statements - Note 14 - Subsequent
Event."

In  addition,  from  time to  time,  the  Company  is a party to  routine  legal
proceedings in the ordinary course of business, such as claims to enforce liens,
condemnation  proceedings  on  properties  in which the Company holds a security
interest,  claims involving the making and servicing of real property loans, and
other issues incident to the business of the Company.  In the Company's opinion,
such  lawsuits  pending  or known to be  contemplated  against  the  Company  at
September 30, 2002 would have no material  effect on the operations or income of
the Company or the Bank, taken as a whole.

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

Not applicable

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.    OTHER INFORMATION

None

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
<S>    <C>
a)       The following Exhibits are filed as part of this report:

            3(i)   Articles of Incorporation****
           3(ii)   Amended Bylaws*****
             4.1   Shareholder Rights Plan**
            10.1   1992 Stock Option Plan of  Roxborough-Manayunk  Federal Savings Bank*
            10.2   1992 Management  Stock Bonus Plan of  Roxborough-Manayunk Bank*
            10.3   1994 Stock Option Plan of Roxborough-Manayunk  Bank*
            10.4   1994 Management Stock Bonus Plan of  Roxborough-Manayunk  Bank*
            10.5   Employment Agreement with John F. McGill, Jr.****
            10.6   Employment Agreement with Jerry Naessens*
            10.7   1999 Stock Option Plan ***
            10.8   1999 Restricted Stock Plan***
            99.0   Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                     Section 906 of the Sarbanes-Oxley Act of 2002
b)       Reports on Form 8-K
</TABLE>
           On  September  4, 2002 the  Company  filed a Form 8-K  (Items 7 an 9)
           which included its 2nd Quarter Report to Shareholders.

           On October 18,  2002 the Company  filed a Form 8-K (items 5 and 9) to
           disclose  that the  Company  executed  a  Standstill  Agreement  with
           Jewelcor Management, Inc., Seymour Holtzman, James A. Mitarotonda and
           Barington Companies Equity Partners, L.P.

---------------
*     Incorporated  by  reference  to the  identically  numbered  exhibit to the
      Company's Form S-1 Registration Statement No. 333-48749 filed on March 27,
      1998.

**    Incorporated  by reference to Exhibit 1 to the Company's Form 8-A filed on
      September 30, 1999.

***   Incorporated  by  reference  to  the  appropriate exhibit of the Company's
      proxy material filed on June 21, 1999.

****  Incorporated by reference to the identically numbered exhibits to the Form
      10-K for December 31, 1999 filed on March 30, 2000.

***** Incorporated by reference to the identically numbered  exhibit to the Form
      10-K for December 31, 2001 filed on March 12, 2002.

                                       16

<PAGE>

                  THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARIES

                                   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.

                                      THISTLE GROUP HOLDINGS, CO.



Date: November 14, 2002               By:  /s/ John F. McGill, Jr.
                                           -------------------------------------
                                           John F. McGill, Jr.
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)




Date: November 14, 2002               By:  /s/ Jerry Naessens
                                           -------------------------------------
                                           Jerry Naessens
                                           Chief Financial Officer
                                           (Principal Financial Officer)


<PAGE>

                            SECTION 302 CERTIFICATION


         I, John F. McGill, Jr., certify that:

1.   I have  reviewed  this  quarterly  report  on Form  10-Q of  Thistle  Group
     Holdings, Co.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          (c)  presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees  who have a  sigificant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date:  November 14, 2002              /s/John F. McGill, Jr.
                                      ------------------------------------------
                                      John F. McGill, Jr.
                                      Chief Executive Officer

<PAGE>

                            SECTION 302 CERTIFICATION


         I, Jerry Naessens, certify that:

1.   I have  reviewed  this  quarterly  report  on Form  10-Q of  Thistle  Group
     Holdings, Co.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     (c)  presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date:  November 14, 2002              /s/Jerry Naessens
                                      ------------------------------------------
                                      Jerry Naessens
                                      Chief Financial Officer