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         June 30, 1998
                               ------------------------------------

                                       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             (I.R.S. 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 x/ 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 August 7, 1998.

             Class                                           Outstanding
---------------------------                                ----------------
$.10 par value common stock                                8,999,666 shares


<PAGE>



                           THISTLE GROUP HOLDINGS, CO.
                                    FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 1998

                                      INDEX

                                                                          Page
                                                                         Number
                                                                         ------

PART I - CONSOLIDATED FINANCIAL INFORMATION OF
             THISTLE GROUP HOLDINGS, CO.

Item 1.  Financial Statements and Notes Thereto.......................     1
Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.................     9

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings............................................    15
Item 2.  Changes in Securities........................................    15
Item 3.  Defaults upon Senior Securities..............................    15
Item 4.  Submission of Matters to a Vote of Security Holders..........    15
Item 5.  Other Materially Important Events............................    15
Item 6.  Exhibits and Reports on Form 8-K.............................    15

SIGNATURES


<PAGE>
                           THISTLE GROUP HOLDINGS, CO.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
                                                                                     June 30,              December 31,
                                                                                       1998                    1997
                                                                                   -----------              ----------
                                                                                   (Unaudited)
ASSETS
<S>                                                                               <C>                     <C>       
Cash on hand and in banks..............................................             $4,253,373              $2,838,744
Interest-bearing deposits..............................................             76,956,318              17,311,852
                                                                                   -----------              ----------
     Total cash and cash equivalents...................................             81,209,691              20,150,596
Investments held to maturity (approximate fair
  value of $33,153,521 and $35,153,660)................................             32,516,201              34,529,423
Investments available for sale at fair value
  (amortized cost of $5,301,315 and $3,231,068)........................              6,352,446               3,698,205
Mortgage-backed securities available for sale
  at fair value (amortized cost of $113,428,279 and $109,847,299)......            114,924,258             111,486,136
Loans receivable (net of allowance for loan losses of
  $757,866 and $782,825)...............................................             95,884,015              96,280,105
Loans held for sale (amortized cost of $2,801,804
  and $1,154,761)......................................................              2,801,804               1,154,761
Accrued interest receivable:
  Loans................................................................                674,640                 675,530
  Mortgage-backed securities...........................................                700,462                 684,637
  Investments..........................................................                534,707                 435,053
Federal Home Loan Bank stock - at cost.................................              1,886,500               1,701,700
Real estate acquired through foreclosure - net.........................                160,789                 116,262
Office properties and equipment - net..................................              1,488,469               1,504,014
Prepaid expenses and other assets......................................              4,821,961               4,233,765
                                                                                   -----------             -----------
     TOTAL ASSETS......................................................           $343,955,943            $276,650,187
                                                                                   ===========             ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits.............................................................           $249,499,600            $230,558,288
  Accrued interest payable.............................................                 82,627                  67,200
  Advances from borrowers for taxes and insurance......................              1,649,662               2,186,283
  FHLB advances........................................................              7,884,000               7,884,000
  Accounts payable and accrued expenses................................             53,472,960               4,206,179
  Dividends payable....................................................                     --                 365,400
  Accrued income taxes.................................................              1,484,418               2,096,000
  Deferred income taxes................................................                357,385                 816,521
                                                                                   -----------            ------------
     TOTAL LIABILITIES.................................................            314,430,652             248,179,871
                                                                                   -----------             -----------
</TABLE>

                                        1

<PAGE>

<TABLE>
<CAPTION>
                                                                                     June 30,              December 31,
                                                                                       1998                    1997
                                                                                   -----------              ----------
                                                                                   (Unaudited)
<S>                                                                               <C>                     <C>         
Commitments and Contingencies
Stockholders' Equity:
  Preferred stock, no par value - 2,000,000 shares
    authorized, none issued............................................                     --                      --
  Common stock, $.10 par; 8,000,000
    shares authorized; 1,621,000 shares
    issued and outstanding.............................................                162,100                 162,100
  Additional paid-in capital...........................................             18,455,330              18,455,330
  Unrealized gain on securities available for sale,
    net of tax.........................................................              1,681,110               1,389,963
  Retained earnings - partially restricted.............................              9,226,751               8,462,923
                                                                                  ------------             -----------
     Total stockholders' equity........................................             29,525,291              28,470,316
                                                                                  ------------             -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.............................           $343,955,943            $276,650,187
                                                                                   ===========             ===========
</TABLE>



See notes to unaudited consolidated financial statements.

                                        2

<PAGE>
                           THISTLE GROUP HOLDINGS, CO.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                          For the Three Months                    For the Six Months
                                                             Ended June 30,                         Ended June 30,
                                                        ------------------------------       -------------------------------
                                                           1998               1997               1998                1997
                                                       ----------         ------------       ------------        -----------
<S>                                                    <C>                <C>                 <C>                 <C>       
INTEREST INCOME:
  Interest on loans.............................       $1,914,481         $2,302,063          $4,271,185          $4,378,135
  Interest on mortgage-backed securities........        1,862,426          1,536,908           3,707,402           3,127,939
  Interest and dividends on investments.........        1,207,093          1,333,029           1,832,791           3,103,926
                                                        ---------          ---------           ---------          ----------
    Total interest income.......................        4,984,000          5,172,000           9,811,378          10,610,000
                                                        ---------          ---------           ---------          ----------
INTEREST EXPENSE:
  Interest on deposits..........................        2,663,374          2,670,953           5,174,718           5,452,768
  Interest on borrowed money....................          113,626            114,047             229,592             230,232
                                                        ---------          ---------           ---------           ---------
    Total interest expense......................        2,777,000          2,785,000           5,404,310           5,683,000
                                                        ---------          ---------           ---------           ---------
NET INTEREST INCOME.............................        2,207,000          2,387,000           4,407,068           4,927,000
PROVISION FOR LOAN LOSSES.......................           15,000             30,000              30,000              60,000
                                                        ---------          ---------           ---------           ---------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES.....................        2,192,000          2,357,000           4,377,068           4,867,000
                                                       ----------          ---------           ---------           ---------

OTHER INCOME:
  Gain on sales of loans held for sale..........               --                 --               1,564                  --
  Gain on sale of deposit liabilities...........               --          2,234,268                  --           2,234,268
  Rental income.................................           41,451             47,822              77,968              86,514
  Gain on sale of office property and                          --             80,984                  --              80,984
    equipment...................................
  Other.........................................          101,549             57,926             184,468             149,234
                                                        ---------          ---------           ---------           ---------
     Total other income.........................          143,000          2,421,000             264,000           2,551,000
                                                        ---------          ---------           ---------           ---------
OTHER EXPENSES:
  Salaries......................................          663,576            637,098           1,332,299           1,346,698
  Office occupancy..............................          127,722            128,582             240,147             258,788
  Depreciation..................................           56,898             59,319             113,918             120,147
  Telephone and postage.........................           36,811             45,934              66,936              94,459
  Pension and profit-sharing....................          167,808            354,514             335,713             542,285
  Federal insurance premium.....................           35,882             38,168              72,366              78,652
  Stationery, printing and supplies.............           27,205             27,735              59,234              59,528
  Payroll taxes.................................           45,590             48,423             100,966             106,980
  Other employee benefits.......................           97,057             76,376             194,057             155,688
  Directors' fees...............................           23,900             23,900              62,000              62,000
  Furniture, fixture and equipment expense......           52,602             53,483             109,635             108,551
  Director, officer and employee expenses.......           48,969             42,792             104,898              74,868
  Professional services.........................           63,183             52,381             136,412             119,847
  Advertising...................................           36,870             24,956              75,067              64,888
  Other.........................................          137,969            182,328             262,394             317,610
                                                        ---------          ---------           ---------           ---------
     Total other expenses.......................        1,622,042          1,795,989           3,266,042           3,510,989
INCOME BEFORE INCOME TAXES......................          712,000          2,982,011           1,375,026           3,907,011
INCOME TAXES....................................          271,500          1,120,800             514,500           1,441,800
                                                        ---------          ---------           ---------           ---------
NET INCOME......................................       $  440,500         $1,861,211          $  860,526          $2,465,211
                                                        =========          =========           =========           =========
BASIC EARNINGS PER SHARE........................       $     0.27         $     1.15          $     0.53          $     1.52
                                                        =========          =========           =========           =========
DILUTED EARNINGS PER SHARE......................       $     0.26         $     1.13          $     0.52          $     1.50
                                                        =========          =========           =========           =========
WEIGHTED AVERAGE SHARES
  OUTSTANDING...................................        1,621,000          1,621,000           1,621,000           1,621,000
AVERAGE DILUTED SHARES
  OUTSTANDING...................................        1,641,000          1,641,000           1,641,000           1,641,000

</TABLE>

See notes to unaudited consolidated financial statements.

                                        3
<PAGE>
                           THISTLE GROUP HOLDINGS, CO.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                              For the Six Months
                                                                                                Ended June 30,
                                                                                  -----------------------------------------
                                                                                        1998                        1997
                                                                                  -------------                 -----------
<S>                                                                                <C>                         <C>       
OPERATING ACTIVITIES
Net income................................................................             $860,827                  $2,465,212
Adjustments to reconcile income to net cash provided
  by operating activities:
  Provision for loan loss.................................................               30,000                      60,000
  Depreciation............................................................              113,918                     120,147
Amortization of:
  Goodwill................................................................                   --                      32,544
  Net (discounts) and premiums on:
    Loans purchased.......................................................               28,885                    (119,026)
    Investments...........................................................             (449,415)                      5,483
    Mortgage-backed securities............................................              334,925                     187,367
Loss on sale of investments..............................................                    --                       4,088
Gain on sale of deposits.................................................                                        (2,234,268)
Loss (gain) on sale of loans.............................................                    --                          --
Loss (gain) on sale of real estate owned.................................                (1,564)                     21,293
Changes in assets and liabilities which provided (used) cash:
Deferred income taxes.....................................................             (609,125)                   (485,450)
Deferred loan fees........................................................               78,157                     118,666
Accrued interest receivable loans.........................................             (239,587)                    145,477
Accrued interest receivable mortgage-backed securities....................              (15,825)                     44,225
Accrued interest receivable investments...................................              140,823                    (250,750)
Prepaid expenses and other assets.........................................             (666,353)                   (572,270)
Accrued interest payable..................................................               15,427                      (5,102)
Accounts payable and accrued expenses.....................................           40,266,125                   1,732,203
Dividends payable.........................................................             (365,400)                     41,200
Accrued income taxes......................................................             (611,582)                  2,237,248
                                                                                    ----------                    ---------
Net cash provided by operating activities.................................           47,910,238                   3,548,387
                                                                                     ----------                   ---------
INVESTING ACTIVITIES
Principal collected on:
   Mortgage-backed securities.............................................           17,613,340                   6,877,355
   Long-term loans........................................................           11,810,194                  10,916,329
   Long-term loans held for sale..........................................               24,907                     101,684
Other loans...............................................................              110,704                     722,115
Long-term loans originated................................................          (12,899,706)                 (9,969,274)
Long-term loans acquired..................................................             (323,973)                   (820,605)
Other loans originated....................................................             (157,692)                   (825,544)

Purchases of:
  Investments.............................................................           (5,570,430)                 (9,612,553)
  FHLB Stock..............................................................             (184,800)                    (10,500)
  Mortgage-backed securities..............................................          (21,529,246)                         --
  Office property and equipment...........................................             (100,218)                         --
Proceeds from sale of:
  Real estate owned.......................................................               33,486                     115,880
  Loans...................................................................                   --                     124,193
  Mortgage-backed securities..............................................                   --                          --
  Investments.............................................................                   --                     983,938
  Office property and equipment...........................................                   --                     204,008
  Maturities and calls of investments.....................................            6,000,000                   3,000,000
                                                                                     ----------                   ---------

Net cash provided by (used in) investing activities.......................          ($5,173,434)                 $1,807,028
                                                                                    -----------                  ----------
</TABLE>
                                        4
<PAGE>
<TABLE>
<CAPTION>
                                                                                              For the Six Months
                                                                                                Ended June 30,
                                                                                  -----------------------------------------
                                                                                        1998                        1997
                                                                                  -------------                 -----------
<S>                                                                                <C>                           <C>       
FINANCING ACTIVITIES
Net (decrease) increase in deposits.......................................           18,941,312                 (24,436,244)
Net decrease in advances from borrowers for                                          
  taxes and insurance.....................................................             (536,621)                   (534,873)
Cash dividends declared...................................................              (82,400)                    (82,400)
                                                                                   ------------                ------------
Net cash (used in) provided by financing activities.......................          $18,322,291                ($25,053,517)
                                                                                    -----------                ------------
Net (decrease) increase in cash and cash equivalents......................          $61,059,095                ($19,698,102)
Cash and cash equivalents, beginning of period............................           20,150,596                  40,929,177
                                                                                    -----------                 -----------
Cash and cash equivalents, end of period..................................          $81,209,691                 $21,231,075
                                                                                    ===========                 ===========

SUPPLEMENTAL DISCLOSURES
Loans transferred to real estate owned....................................             $108,324                          --
Income taxes paid.........................................................              514,500                   1,441,800
Interest paid on deposits.................................................            5,175,252                   5,452,768
Funds borrowed............................................................            7,884,000                   7,884,000

</TABLE>

            See notes to unaudited consolidated financial statements.

                                        5

<PAGE>



                           THISTLE GROUP HOLDINGS, CO.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - PRINCIPLES OF CONSOLIDATION

         The consolidated  financial  statements as of and for the three and six
         month  periods  ended June 30, 1998 and 1997  include  the  accounts of
         Thistle  Group  Holdings,  Inc.  (the  "Company")  and its  subsidiary,
         Roxborough-Manayunk   Federal  Savings  Bank  (the  "Bank")  which,  as
         discussed  in Note 3,  became the wholly  owned  subsidiary  of Thistle
         Group  Holdings,  Co.  on July 14,  1998.  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  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 generally accepted accounting  principles.  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  periods  ended  June  30,  1998  and  1997 are not
         necessarily  indicative  of the results  which may be expected  for the
         entire fiscal year or any other period.

         These  statements  should be read in conjunction  with the consolidated
         financial  statements  and  related  notes  which are  incorporated  by
         reference in the Company's Prospectus dated May 14, 1998.

NOTE 3 - CONVERSION AND REORGANIZATION

         On July 14, 1998 FJF Financial,  M.H.C.  (the "Mutual Holding Company")
         completed   its   mutual   to   stock   conversion   ("Conversion   and
         Reorganization"). In connection with the Conversion and Reorganization,
         Thistle Group Holdings, Co., a Pennsylvania corporation, sold 7,856,370
         shares of its common stock in subscription  and community  offerings at
         $10.00  per  share.  Furthermore,  based on an  independent  appraisal,
         existing  stockholders  of the Company,  other than the Mutual  Holding
         Company,  converted  each share of the Company  into  5.5516  shares of
         common  stock  of  Thistle  Group  Holdings,  Co.  ("Exchange").   Upon
         completion of the  Conversion  and  Reorganization,  the Mutual Holding
         Company and the Company  ceased to exist and the Bank  changed its name
         to  Roxborough-Manayunk  Bank and became the wholly owned subsidiary of
         Thistle Group Holdings, Co. A total of 9,000,000 shares of common stock
         of Thistle Group Holdings,  Co. (excluding  fractional shares issued in
         the  Exchange)  were  issued  in  connection  with the  Conversion  and
         Reorganization.

         For the  purpose of  granting  eligible  members of the Mutual  Holding
         Company  a  priority  in the  event of  further  liquidation,  the Bank
         established  a  liquidation   account  in  accordance  with  applicable
         regulations.   In  the  event  (and  only  in  such  event)  of  future
         liquidation  of the  Bank,  an  eligible  savings  account  holder  who
         continues to maintain a savings  account shall be entitled to receive a
         distribution from the liquidation  account, in the proportionate amount
         of the then-

                                        6

<PAGE>



         current adjusted balance of the savings deposits then held,  before any
         distributions may be made with respect to capital stock.

         The common stock of Thistle Group Holdings, Co. began  trading  on  the
         Nasdaq National Market under the symbol "THTL" on July 14, 1998.

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS

              Comprehensive  Income.  Effective  January  1, 1998,  the  Company
         adopted  Statement of Financial  Accounting  Standard ("SFAS") No. 130,
         "Reporting  Comprehensive  Income."  Statement  No.  130  requires  the
         reporting  of  comprehensive  income in  addition  to net  income  from
         operations.   Comprehensive   income  is  a  more  inclusive  financial
         reporting  methodology  that includes  disclosure of certain  financial
         information   that   historically   has  not  been  recognized  in  the
         calculation of net income. As required, the provisions of Statement No.
         130 have been retroactively applied to previously reported periods. The
         application  of  Statement  No.  130  had  no  material  effect  on the
         Company's consolidated financial condition or operations. For the three
         and six  months  ended  June  30,  1998,  the  Company  reported  other
         comprehensive  income of $278,889  and  $1,151,673,  respectively,  and
         $2,361,559 and $2,526,066 for the same periods in 1997.  Such increased
         income  consisted  entirely  of  unrealized  gains,  net of  taxes,  on
         available for sale securities.

              FASB Statement on Earnings Per Share.  In March 1997,  FASB issued
         SFAS No. 128. The  Statement  establishes  standards  for computing and
         presenting  earnings  per share and applies to entities  with  publicly
         held common stock or potential common stock. This Statement  simplifies
         the  standards  for computing  earnings per share  previously  found in
         Accounting  Principles Board ("APB") Opinion No. 15, Earnings per Share
         ("EPS"),  and makes them comparable to international EPS standards.  It
         replaces the  presentation  of primary EPS with a presentation of basic
         EPS. It also requires dual presentation of basic and diluted EPS on the
         face of the income  statement  for all entities  with  complex  capital
         structures  and  requires a  reconciliation  of the  numerator  and the
         denominator  of  the  basic  EPS   computation  to  the  numerator  and
         denominator of the diluted EPS computation. Basic EPS 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 EPS 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 entity. Diluted EPS is computed
         similarly  to fully  diluted  EPS  pursuant to APB Opinion No. 15. This
         statement  supersedes  Opinion 15 and  American  Institute of Certified
         Public Accountants ("AICPA") Accounting Interpretation 1-102 of Opinion
         15. This  statement is effective  for financial  statements  issued for
         periods ending after December 15, 1997, including interim periods. SFAS
         No. 128 has been adopted by the Company.

            FASB Statement on Disclosure of Information about Capital Structure.
         In  February  1997,  the FASB  issued  SFAS  No.  129.  The  Statement
         incorporates  the  disclosure  requirements  of APB  Opinion  No.  15,
         Earnings  per  Share,  and makes  them  applicable  to all  public and
         nonpublic  entities  that  have  issued  securities  addressed  by the
         Statement.  APB  Opinion  No. 15 requires  disclosure  of  descriptive
         information  about  securities that is not necessarily  related to the
         computation  of  earnings  per share.  This  statement  continues  the
         previous   requirements  to  disclose  certain  information  about  an
         entity's  capital  structure  found in APB  Opinions  No. 10,  Omnibus
         Opinion- 1966, and No. 15, Earnings per Share,  and FASB Statement No.
         47,  Disclosure  of  Long-Term  Obligations,  for  entities  that were
         subject to the requirements of those

                                        7

<PAGE>



         standards.   This  Statement  eliminates  the  exemption  of  nonpublic
         entities from certain disclosure requirements of Opinion 15 as provided
         by FASB  Statement No. 21,  Suspension of the Reporting of Earnings per
         Share and Segment Information by Nonpublic  Enterprises.  It supersedes
         specific disclosure requirements of Opinions 10 and 15 and Statement 47
         and  consolidates  them in this Statement for ease of retrieval and for
         greater  visibility to nonpublic  entities.  The Statement is effective
         for financial  statements  for periods  ending after December 15, 1997.
         SFAS No. 129 has been adopted by the Company.

              FASB  Statement on Accounting  for  Stock-Based  Compensation.  In
         October  1995,  the FASB issued  SFAS No.  123.  SFAS No. 123 defines a
         "fair value based  method" of accounting  for an employee  stock option
         whereby  compensation  cost is  measured at the grant date based on the
         value of the award and is recognized over the service period.  FASB has
         encouraged all entities to adopt the fair value based method,  however,
         it will allow  entities to  continue  the use of the  "intrinsic  value
         based  method"  prescribed  by APB Opinion No. 25. Under the  intrinsic
         value based method, compensation cost is the excess of the market price
         of the stock at the grant date over the amount an employee  must pay to
         acquire the stock.  However,  most stock option plans have no intrinsic
         value  at the  grant  date  and,  as  such,  no  compensation  cost  is
         recognized under APB Opinion No. 25. Entities  electing to continue use
         of the accounting treatment of APB Opinion No. 25 must make certain pro
         forma  disclosures  as if the fair value based method had been applied.
         The  accounting   requirements  of  SFAS  No.  123  are  effective  for
         transactions  entered into in fiscal years beginning after December 15,
         1995.  Pro forma  disclosures  must  include  the effects of all awards
         granted in fiscal years beginning after December 15, 1994. The Mid-Tier
         Holding  Company  expects to use the "intrinsic  value based method" as
         prescribed by APB Opinion No. 25.

              FASB   Statement  on  Segments  of  an   Enterprise   and  Related
         Information.  Also  in  June  1997,  the  FASB  issued  SFAS  No.  131,
         Disclosures  About Segments of an Enterprise  and Related  Information.
         SFAS No. 131 requires an entity to disclose financial  information in a
         manner  consistent to  internally  used  information  and requires more
         detailed  disclosures  of operating  and  reporting  segments  that are
         currently in practice.  SFAS No. 131 is applicable for years  beginning
         after  December 15, 1997.  Management  does not believe the adoption of
         this  statement  will  have  on the  Company's  consolidated  financial
         condition or results of operations.

              FASB Statement on Employers'  Disclosure  About Pensions and Other
         Postretirement  Benefits.  In February  1998,  the FASB issued SFAS No.
         132,  Employers'  Disclosure  About  Pensions and Other  Postretirement
         Benefits. SFAS No. 132 revises employers' disclosures about pension and
         other postretirement  benefit plans. It does not change the measurement
         or  recognition  of those plans.  SFAS No. 132 is applicable  for years
         beginning  after  December  15, 1997.  Management  does not believe the
         adoption of this statement  will have a material  adverse effect on the
         Company's consolidated financial condition or results of operations.


                                        8

<PAGE>



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

General

         The Company is a Pennsylvania  corporation organized in May 1997 at the
direction of the Board of Directors of the Bank to become an intermediate  stock
holding  company  of the Bank in May  1997.  Thistle  Group  Holdings,  Co. is a
Pennsylvania  Corporation  organized in March 1998 to acquire all of the Capital
Stock of the Bank in the Conversion and Reorganization.  Thistle Group Holdings,
Co. is a unitary  savings and loan holding  company which,  under existing laws,
generally is not restricted in the types of business  activities in which it may
engage  provided  that the Bank  retains a  specified  amount  of its  assets in
housing-related investments.

         The Bank is a  federally-chartered  stock savings bank. The Bank serves
the Pennsylvania  counties of Philadelphia and Delaware through a network of six
offices, providing a full range of retail banking services, with emphasis on the
origination of one-to-four family residential mortgages.

         The Bank is primarily  engaged in attracting  deposits from the general
public through its offices and using those and other available  sources of funds
to originate loans secured by one to four-family  residences.  In addition,  the
Bank originates  consumer loans, such as home equity loans, and multi-family and
nonresidential  real  estate  loans.  Such loans  generally  provide  for higher
interest  rates and shorter  terms than  single-family  residential  real estate
loans.  To a lesser  extent,  the Bank  originates  loans  secured  by  existing
multi-family residential and nonresidential real estate.

         Because the Conversion and  Reorganization was not completed until July
14, 1998, the  information  provided herein is that of the Company and the Bank,
and not that of Thistle Group Holdings, Co.

Comparison of Financial Condition

         Total assets  increased  $67.3  million at June 30, 1998 as compared to
December 31, 1997.  Interest-bearing deposits increased $59.6 million due to the
receipt  of  $50.4  million  in  stock  subscriptions  in  connection  with  the
Conversion  and  Reorganization.   Net  loans  and  other  investments  remained
relatively stable.

         Total deposits  increased,  after interest credited,  by $18.9 million.
Accounts  payable  increased  $9.2  million  due to the  above  mentioned  stock
subscriptions.

         Total  stockholders'  equity increased by $1 million,  primarily due to
earnings  and  unrealized  gains on  securities  available  for sale  during the
period.


                                        9

<PAGE>



Non-performing Assets

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

                                               At                     At
                                            June 30,              December 31,
                                            --------              ------------
                                              1998                   1997
                                              ----                   ----
                                                (Dollars in Thousands)

Total non-performing loans..........         $ 609                   $ 716
Real estate owned...................           160                     116
                                              ----                    ----
Total non-performing assets.........         $ 769                   $ 832
                                              ====                    ====
Total non-performing loans to
  total loans.......................           .80%                    .74%
                                              ====                    ====
Total non-performing assets to
  total assets......................           .22%                    .30%
                                              ====                    ====


         Of the $107,000 decrease in non-performing  loans,  $76,000 represented
three  foreclosures  transferred  to real estate owned.  Furthermore,  two loans
previously non-performing were reclassified as performing.

Comparison of Earnings for the Three and Six Months Ended June 30, 1998 and 1997

         Net Income. Net income for the three and six months ended June 30, 1998
decreased  1,420,000 or 76% and $1,605,000 or 66%,  respectively,  over the same
periods in 1997. These decreases were due primarily to decreases in other income
and net interest income,  offset somewhat by decreased income tax expense caused
by the sale of deposit liabilities in 1997.

         Total Interest Income.  Interest income decreased  $188,000 or .4%, and
$799,000 or 8%, for the three and six months ended June 30, 1998,  respectively,
as compared to the same periods in 1997.  These  decreases were due in most part
to decreases of $37 million in the average  balances of interest earning assets,
primarily  mortgage-backed  securities and liquid assets, due to the branch sale
in May 1997.

         Total Interest Expense. Interest expense remained relatively stable for
the three months ended June 30, 1998 and 1997,  and  decreased by $278,000 or 5%
for the six months ended June 30, 1998.  Interest expense  decreased for the six
months ended June 30, 1998  primarily due to the decreases of $37 million in the
average balance of interest  bearing  deposits due to the sale of the two branch
offices as previously discussed,  offset somewhat by the increased cost of funds
from 4.40% to 4.44%.

         Net Interest Income.  Net interest income decreased  $165,000 or 7% and
$490,000 or 10%, due to the reasons discussed in the two previous  sections.  In
addition,  the net  interest  spread,  the  difference  between the average rate
earned and the average rate paid,  decreased by 12 basis points to 2.46% for the
quarter  ended June 30, 1998 and  decreased 7 basis  points to 3.20% for the six
months ended June 30, 1997.


                                       10

<PAGE>



         Provision  for Losses on Loans.  The  provision for losses on loans for
the three and six months  ended  June 30,  1998  totaled  $15,000  and  $30,000,
respectively,  compared to $30,000  and  $60,000  for the same  periods in 1997.
Provisions  for  losses  included  charges to reduce the  recorded  balances  of
mortgage loans  receivable and the collateral real estate to their estimated net
realizable  value or fair value,  as  applicable.  Such  provisions are based on
management's  estimate of net realizable  value or fair value of the collateral,
as  applicable,  considering  the  current  and  currently  anticipated  further
operating  or  sales   conditions,   thereby   causing  these  estimates  to  be
particularly  susceptible to changes that could result in a material  adjustment
to results of  operations  in the near term.  Recovery of the carrying  value of
such  loans and its  collateral  is  dependent  to a great  extent on  economic,
operating and other conditions that may be beyond the Bank's control.

         Management  will continue to review its loan portfolio to determine the
extent,  if any,  to which  further  additional  loss  provisions  may be deemed
necessary.  There can be no  assurance  that the  allowance  for losses  will be
adequate  to cover  losses  which may in fact be realized in the future and that
additional provisions for losses will not be required.

         Other Income.  Other income decreased  $2,278,000 and $2,287,000 during
the three and six months  ended June 30, 1998 as compared to the same periods in
1997 due  primarily to the absence of a $2,234,000  gain on the sale of deposits
and a $80,000  gain on the sale of assets due to the sale of two branches of the
Bank in May 1997.  Other income  increased  $43,000 and $35,000  during the same
period due to an increase in fee income.

         Other  Expenses.  Other  expenses  decreased  by $174,000  and $245,000
during the three and six months ended June 30, 1998  primarily due to a $186,000
reduction  in profit  sharing  costs.  Profit  sharing cost  decreased  due to a
decrease in net income.

         The Company expects increased costs due to being a public company.

         Income Tax Expanse.  Income tax expense decreased significantly due  to
decreased earnings.

Liquidity and Capital Resources

         On June 30, 1998, the Bank was in compliance with its three  regulatory
capital requirements as follows:
                                             Amount                     Percent
                                             ------                     -------
                                                   (Dollars in thousands)

Tangible capital......................      $27,844                       8.09%
Tangible capital requirement..........       10,318                       3.00
                                             ------                       ----
Excess over requirement...............      $17,525                       5.09%
                                             ======                       ====

Core capital..........................      $27,844                       8.09%
Core capital requirement..............        5,159                       1.50%
                                             ------                       ----
Excess over requirement...............      $22,685                       6.59%
                                             ======                       ====

Risk based capital....................      $27,844                      26.15%
Risk based capital requirement........        8,517                       8.00%
                                             ------                      -----
Excess over requirement...............      $19,327                      18.15%
                                             ======                      =====



                                       11

<PAGE>




         The Bank's  primary  sources of funds are deposits  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 Bank is the  origination  and
purchase of mortgage loans,  mortgage-backed  securities and other  investments.
During the six months ended June 30, 1998,  the Bank  originated  $12,900,000 of
mortgage loans. The Bank also purchases loans and mortgage-backed  securities to
reduce  liquidity  not  otherwise  required for local loan demand.  Purchases of
mortgage  loans  and  mortgage-backed  securities  totaled  $324,000  and  $21.5
million, respectively,  during the six month period. Other investment activities
include  investment  in short term  certificates  of deposit of other  financial
institutions,  FHLB of Pittsburgh stock,  consumer loans and the U.S. government
and federal agency obligations.

         The Bank has other sources of liquidity if a need for additional  funds
arises.  Although the Bank has historically not utilized  borrowings as a source
of funds,  at June 30, 1998, the Bank had  outstanding  $7.9 million in advances
from the FHLB of  Pittsburgh.  In addition,  other  sources of liquidity  can be
found in the Bank's balance sheet, such as investment securities maturing within
one  year  and   unencumbered   mortgage-backed   securities  that  are  readily
marketable.

         The Bank is  required to maintain  minimum  levels of liquid  assets as
defined  by  OTS  regulations.  The  requirement,  which  may be  varied  at the
direction of the OTS depending upon economic  conditions  and deposit flows,  is
based upon a percentage  of deposits  and  short-term  borrowings.  The required
minimum ratio is currently  4.0%. The Bank's  liquidity ratio was 41.81% at June
30, 1998.

         The Bank's  most  liquid  assets are cash and cash  equivalents,  which
include investments in highly liquid short-term investments.  The level of these
assets are dependent on the Bank's operating, financing and investing activities
during any given period.  At June 30, 1998, cash and cash  equivalents  totalled
$81.2 million due primarily to the stock subscription offering.

         The Bank  anticipates  that it will have sufficient  funds available to
meet its current commitments.  As of June 30, 1998, the Bank had $1.6 million in
commitments  to fund loans.  Certificates  of deposit  which were  scheduled  to
mature  in one  year or  less  as of  June  30,  1998  totaled  $102.3  million.
Management believes that a significant portion of such deposits will remain with
the Bank.

Impact of Inflation and Changing Prices

         The consolidated financial statements of the Company and notes thereto,
presented  elsewhere  herein,  have been prepared in accordance with GAAP, which
require the measurement of financial  position and operating results in terms of
historical  dollars without  considering  the change in the relative  purchasing
power of money over time due to inflation.  The impact of inflation is reflected
in the  increased  cost of the  Company's  operations.  Unlike  most  industrial
companies,  nearly all the assets and  liabilities of the Company are financial.
As a result,  interest rates have a greater impact on the Company's  performance
than do the  effects  of  general  levels of  inflation.  Interest  rates do not
necessarily  move in the same  direction  or to the same extent as the prices of
goods and services.



                                       12

<PAGE>



Additional Key Operating Ratios

                                      For the                     For the
                                Three Months Ended            Six Months Ended
                                     June 30,                     June 30,
                             --------------------------   ----------------------
                               1998(1)        1997(1)       1998(1)      1997(1)
                             ----------  --------------   -----------   --------

Return on average assets.....    .56%           2.70%          .55%        1.79%
Return on average equity.....   6.07%          28.79%         5.93%       19.05%
Interest rate spread.........   2.46%           3.26%         2.46%        3.20%
Net interest margin..........   3.02%           4.04%        3.011%        3.63%



                                         At June 30,             At December 31,
                                             1998                      1997
                                         -----------             ---------------

Tangible book value per share........       $17.18                    $16.70


----------------
(1)      The ratios for the three and six month period are annualized.

Year 2000

         A great  deal of  information  has been  disseminated  about the global
computer year 2000. Many computer  programs that can only  distinguish the final
two digits of the year entered (a common programming  practice in earlier years)
are  expected  to read  entries  for the year 2000 as the year 1900 and  compute
payment,  interest or delinquency  based on the wrong date or are expected to be
unable to compute  payment,  interest or  delinquency.  Rapid and accurate  data
processing  is essential to the operation of the Bank.  Data  processing is also
essential to most other financial institutions and many other companies.

         Based on a recognized need to upgrade the data processing system, to be
more  competitive in the marketplace  and to address the year 2000 problem,  the
Bank  signed  an  agreement  with  Open  Solutions  Incorporated,   Glastonbury,
Connecticut,  to purchase its information processing system. The system has been
certified by its vendor as year 2000 compliant.  This system, which is scheduled
to be  installed  at the Bank in late July  1998,  is a PC-based  client  server
system  which,  management  believes,  will serve the Bank well  beyond the year
2000. It is estimated the total cost of this system will be  approximately  $1.2
million with an annual cost of approximately  $344,000  including  depreciation,
software cost and maintenance.

Market Risk Analysis

         The goal of the  Bank's  asset/liability  policy is to manage  interest
rate risk so as to maximize net interest  income over time in changing  interest
rate  environments.  Management  monitors the Bank's net  interest  spreads (the
difference between yields received on assets and rates paid on liabilities) and,
although  constrained by market  conditions,  economic  conditions,  and prudent
underwriting standards, it

                                       13

<PAGE>



offers  deposit  rates and loan  rates in an attempt to  maximize  net  interest
income. Management also attempts to fund the Bank's assets with liabilities of a
comparable  duration to minimize  the impact of changing  interest  rates on the
Bank's net interest income.  Since the relative spread between  financial assets
and liabilities is constantly  changing,  the Bank's current net interest income
may not be an indication of future net interest income.

         The Bank has sought to manage its interest  rate risk by  maintaining a
high  degree  of liquid  assets  and  short-term  securities,  coupled  with the
purchase of  mortgage-backed  securities  secured by  adjustable  rate  mortgage
loans.

         The Bank is also  managing  interest  rate risk by the  origination  of
multi-family residential loans with a balloon payment after five to seven years.
In general,  these  loans have higher  yields,  shorter  maturities  and greater
interest rate sensitivity than traditional one- to four-family  residential real
estate loans.

         The Bank  constantly  monitors  its  deposits  in an effort to decrease
their interest rate sensitivity.  Rates of interest paid on deposits at the Bank
are priced competitively in order to meet the Bank's asset/liability  management
objectives  and spread  requirements.  As of June 30, 1998,  the Bank's  savings
accounts,  checking  accounts and money market deposit  accounts  totaled $125.0
million or 50.1% of its total deposits.  The Bank believes,  based on historical
experience,  that a substantial portion of such accounts represent  non-interest
rate sensitive core deposits.

         The  Bank's  Board  of  Directors  is  responsible  for  reviewing  and
approving the asset and liability policies.  The Board meets quarterly to review
interest  rate risk and trends,  as well as  liquidity  and  capital  ratios and
requirements.  The  Bank's  management  is  responsible  for  administering  the
policies and determinations of the Board of Directors with respect to the Bank's
asset and liability  goals and  strategies.  Management  expects that the Bank's
asset and liability  policies and strategies will continue as described above so
long as  competitive  and  regulatory  conditions in the  financial  institution
industry and market interest rates continue as they have in recent years.



                                       14

<PAGE>



                           THISTLE GROUP HOLDINGS, CO.

                                     PART II

ITEM 1.  LEGAL PROCEEDINGS

          Neither the  Company nor the Bank was engaged in any legal  proceeding
          of a material  nature at June 30, 1997. 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  security  interests,  claims
          involving the making and servicing of real property  loans,  and other
          issues incident to the business of the Company. There were no lawsuits
          pending or known to be  contemplated  against  the Company at June 30,
          1998 that would have a material  effect on the operations or income of
          the Company or the Bank, taken as a whole.

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

          On June 26, 1998, the Company held a Special  Meeting of  Stockholders
          to vote upon the Plan.  The Plan was  approved by a vote of  1,602,000
          for, 0 against and 0 abstained.

ITEM 5.  OTHER MATERIALLY IMPORTANT EVENTS

          See  Note  3  to  the  Unaudited   Consolidated  Financial  Statements
          regarding the Conversion and Reorganization.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
          <S>     <C>             <C>
          (a)     Exhibits:
                  Exhibit 2       Plan of Conversion and Reorganization of FJF Financial, M.H.C.
                                  and Plans of Merger between FJF Financial, M.H.C., Thistle
                                  Group Holdings, Inc. and Roxborough-Manayunk Federal Savings
                                  Bank*

                  Exhibit 3(i)    Articles of Incorporation of Thistle Group Holdings, Co.*

                  Exhibit 3(ii)   Bylaws of Thistle Group Holdings, Co.*

                  Exhibit 4       Specimen Stock Certificate of Thistle Group Holdings, Co.*


                  Exhibit 10.1    1992 Stock Option Plan of Roxborough-Manayunk Federal Savings
                                  Bank*
</TABLE>

                                       15

<PAGE>

<TABLE>
<CAPTION>
          <S>     <C>             <C>

                  Exhibit 10.2    1992 Management Stock Bonus Plan of Roxborough-Manayunk
                                  Federal Savings Bank*

                  Exhibit 10.3    1994 Stock Option Plan of Roxborough-Manayunk Federal Savings
                                  Bank*

                  Exhibit 10.4    1994 Management Stock Bonus Plan of Roxborough-Manayunk
                                  Federal Savings Bank*

                  Exhibit 10.5    Employment Agreement with John F. McGill*

                  Exhibit 10.6    Employment Agreement with Jerry Naessens*

                  Exhibit 10.7    Employment Agreement with John F. McGill, Jr.*

                  Exhibit 99      Proxy Material for Thistle Group Holdings, Inc.*

                  Exhibit 27      Financial Data Schedule (in electronic filing only)

              (b) Reports on Form 8-K - None.

                  On July 14,  1998,  Thistle  Group  Holdings,  Co.,  filed a
                  Current  Report on Form 8-K announcing the completion of the
                  Conversion  and  Reorganization,   including  the  sale  and
                  issuance  of  9,000,000  shares of common  stock of  Thistle
                    Group Holdings, Co.
</TABLE>



-------------------
*    Incorporated  by reference to the  Registrant's  Registration  Statement on
     Form S-1  initially  filed with the  Commission on March 26, 1998 (File No.
     333-48749).

                                       16

<PAGE>


                   THISTLE GROUP HOLDINGS, CO. AND SUBSIDIARY

                                   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: August 14, 1998                   By:/s/John F. McGill, Jr.
                                           -------------------------------------
                                           John F. McGill, Jr.
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)



Date: August 14, 1998                  By: /s/Jerry Naessens
                                           -------------------------------------
                                           Jerry Naessens
                                           Chief Financial Officer and Secretary
                                           (Principal Officer)