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, 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 _ 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 16, 1998.

             Class                                         Outstanding    
---------------------------                              ---------------- 
$.10 par value common stock                              8,999,989 shares


<PAGE>


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

                                      INDEX

                                                                      Page
                                                                     Number
                                                                     ------

PART I - UNAUDITED 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.......................     7
PART II - OTHER INFORMATION

Item 1.  Legal Proceedings..........................................    13 
Item 2.  Changes in Securities......................................    13
Item 3.  Defaults upon Senior Securities............................    13 
Item 4.  Submission of Matters to a Vote of Security Holders........    13 
Item 5.  Other Materially Important Events..........................    13
Item 6.  Exhibits and Reports on Form 8-K...........................    13

SIGNATURES

<PAGE>



                           THISTLE GROUP HOLDINGS, CO.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                   September 30,         December 31,
                                                                                       1998                  1997
                                                                                   -------------         ------------
                                                                                   (Unaudited)
<S>                                                                                <C>                    <C>     
ASSETS
Cash on hand and in banks...........................................                $   5,247              $  2,839
Interest-bearing deposits...........................................                   29,706                17,312
                                                                                      -------                ------
     Total cash and cash equivalents................................                   34,953                20,151
Investments held to maturity (approximate fair
  value of $41,859 and $35,153).....................................                   40,953                34,529
Investments available for sale at fair value
  (amortized cost of $17,565 and $3,231)............................                   17,874                 3,698
Mortgage-backed securities available for sale
  at fair value (amortized cost of $228,757 and $109,847)...........                  231,357               111,486
Loans receivable (net of allowance for loan losses of
  $757 and $783)....................................................                  118,997                96,280
Loans held for sale.................................................                    2,779                 1,155
Accrued interest receivable.........................................                    3,176                 1,795
Federal Home Loan Bank stock - at cost..............................                    4,394                 1,702
Real estate acquired through foreclosure - net......................                      175                   116
Office properties and equipment - net...............................                    2,565                 1,504
Prepaid expenses and other assets...................................                    3,259                 4,234
                                                                                      -------               -------
     TOTAL ASSETS...................................................                 $460,482              $276,650
                                                                                      =======               =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits..........................................................                 $264,030              $230,558
  Accrued interest payable..........................................                      361                    67
  Advances from borrowers for taxes and insurance...................                    1,632                 2,186
  FHLB advances.....................................................                   87,884                 7,884
  Accounts payable and accrued expenses.............................                    2,944                 4,206
  Dividends payable.................................................                      450                   366
  Accrued income taxes..............................................                    1,043                 2,096
  Deferred income taxes.............................................                    1,184                   817
                                                                                      -------               -------
     TOTAL LIABILITIES..............................................                  359,528               248,180
                                                                                      -------               -------

Commitments and Contingencies

Stockholders' Equity:
  Preferred stock, no par value -10,000,000 shares authorized, none
issued in 1998; 2,000,000 shares authorized, none issued in 1997                           --                    --
  Common stock - $.10 par, 40,000,000 shares authorized, 8,999,989
issued and outstanding 1998; $.10 par, 8,000,000 shares authorized,
1,621,000 shares issued and outstanding 1997                                              900                   162
  Additional paid-in capital........................................                   94,645                18,455
  Employee Stock Ownership Plan.....................................                   (6,180)                   --
  Unrealized gain on securities available for sale,  net of tax.....                    1,919                 1,390
  Retained earnings - partially restricted..........................                    9,670                 8,463
                                                                                      -------               -------
     Total stockholders' equity.....................................                  100,954                28,470
                                                                                      -------               -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..........................                 $460,482              $276,650
                                                                                     ========               =======
</TABLE>

See notes to unaudited consolidated financial statements.

                                       1

<PAGE>

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

                                                           For the Three Months              For the Nine Months
                                                            Ended September 30,              Ended September 30,
                                                            -------------------              -------------------
                                                           1998            1997             1998             1997
                                                           ----            ----             ----             ----
<S>                                                    <C>               <C>              <C>               <C>     
INTEREST INCOME:
  Interest on loans..........................             $2,161          $2,280           $6,432           $6,658
  Interest on mortgage-backed securities.....              2,576           1,564            6,283            4,692
  Interest and dividends on investments......              1,838           1,178            3,671            4,282
                                                           -----           -----            -----            -----
    Total interest income....................              6,575           5,022           16,386           15,632
                                                           -----           -----           ------           ------
INTEREST EXPENSE:
  Interest on deposits.......................              2,804           2,545            7,978            7,998
  Interest on borrowed money.................                520             116              749              346
                                                           -----           -----            -----            -----
    Total interest expense...................              3,324           2,661            8,727            8,344
                                                           -----           -----            -----            -----
NET INTEREST INCOME..........................              3,251           2,361            7,659            7,288
PROVISION FOR LOAN LOSSES....................                 15              30               45               90
                                                           -----           -----            -----            -----
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES..................              3,236           2,331            7,614            7,198
                                                           -----           -----            -----            -----
OTHER INCOME:
  Gain on sales of real estate owned.........                 --              --                2               --
  Gain on sale of deposit liabilities........                 --              --               --            2,234
  Rental income..............................                 48              43              130              130
  Gain on sale of office property and
    equipment................................                                                                   81
  Other......................................                 86              74              269              223
                                                           -----           -----            -----            -----
     Total other income......................                134             117              401            2,668
                                                           -----           -----            -----            -----
OTHER EXPENSES:
  Salaries and employee benefits.............              1,019             927            2,881            2,971
  Occupancy and equipment....................                262             218              728              705
  Federal insurance premium..................                 36              43              108              121
  Professional fees..........................                 72              50              209              170
  Advertising and promotion..................                 27              26              102               91
  Other......................................                537             296             1194             1013
                                                           -----           -----            -----            -----
     Total other expenses....................              1,953           1,560            5,222            5,071
                                                           -----           -----            -----            -----
INCOME BEFORE INCOME TAXES...................              1,417             888            2,793            4,795
                                                           -----             ---            -----            -----
INCOME TAXES.................................                524             346            1,039            1,788
                                                           -----           -----            -----            -----
NET INCOME...................................               $893            $542           $1,754           $3,007
                                                            ====            ====           ======           ======
BASIC EARNINGS PER SHARE.....................               $.10             N/A              N/A              N/A
                                                            ====
DILUTED EARNINGS PER SHARE...................               $.09             N/A              N/A              N/A
                                                            ====
WEIGHTED AVERAGE SHARES
  OUTSTANDING - BASIC........................          8,371,479             N/A              N/A              N/A
WIEGHTED AVERAGE SHARES
  OUTSTANDING - DILUTED......................          8,547,339             N/A              N/A              N/A
</TABLE>

See notes to unaudited consolidated financial statements.

                                       2
<PAGE>
                           THISTLE GROUP HOLDINGS, CO.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                               For the Nine Months
                                                               Ended September 30,
                                                               -------------------
                                                                1998         1997
                                                                ----         ----
<S>                                                         <C>          <C>      
OPERATING ACTIVITIES:
Net income .............................................   $   1,754    $   3,007
Adjustments to reconcile income to net cash provided
  by operating activities:
  Provision for loan loss ..............................          45           90
  Depreciation .........................................         209          170
Amortization of:
  Goodwill .............................................        --             33
  Net (discounts) and premiums on:
    Loans purchased ....................................         (86)        (119)
    Investments ........................................        (632)           5
    Mortgage-backed securities .........................         650          187
 Loss on sale of investments ...........................        --              4
 Gain on sale of loans held for sale ...................        --             (9)
 Gain on sale of deposits ..............................        --         (2,234)
   Proceeds from sale of loans held for sale ...........        --          1,055
 (Gain) Loss on sale of real estate owned ..............         (1)           21
 (Increase) decrease in other assets ...................        (379)         666
 Increase (decrease) in other liabilities ..............      (1,721)       2,408
                                                           ---------    ---------
Net cash (used in)  provided by operating activities ...        (161)       5,284
                                                           ---------    ---------
INVESTING ACTIVITIES:
Principal collected on:
   Mortgage-backed securities ..........................      28,729        9,847
   Long-term loans .....................................      16,829       18,643
   Long-term loans held for sale .......................          47           48
   Other loans .........................................         111          722
Long-term loans originated .............................     (20,008)     (13,702)
Long-term loans acquired ...............................     (21,335)        (821)
Other loans originated .................................        (158)        (825)
Purchases of:
  Investments ..........................................     (33,730)     (20,873)
  FHLB Stock ...........................................      (2,692)         (10)
  Mortgage-backed securities ...........................    (149,392)     (18,211)
  Office property and equipment ........................      (1,272)         (31)
Proceeds from sale of:
  Real estate owned ....................................          79          116
  Loans ................................................        --            124
  Investments ..........................................        --            984
  Office property and equipment ........................        --            204
Maturities and calls of investments ....................      14,384       31,886
                                                           ---------    ---------
Net cash provided by (used in) investing activities ....    (168,408)       8,101
                                                           ---------    ---------
FINANCING ACTIVITIES:
Net (decrease) increase in deposits ....................      33,472      (23,525)
Net decrease in advances from borrowers for
  taxes and insurance ..................................        (554)        (617)
 Net increase in FHLB borrowings .......................      80,000         --
 Net proceeds from the sale of common stock ............      70,985         --
Cash dividends declared ................................        (532)        (124)
                                                           ---------    ---------
Net cash (used in) provided by financing activities ....     183,371      (24,266)
                                                           ---------    ---------
Net (decrease) increase in cash and cash equivalents ...      14,802      (10,881)
                                                           ---------    ---------
Cash and cash equivalents, beginning of period .........      20,151       40,929
                                                           ---------    ---------
Cash and cash equivalents, end of period ...............      34,953       30,048
                                                           =========    =========

SUPPLEMENTAL DISCLOSURES
Loans transferred to real estate owned .................   $     168    $     249
Income taxes paid ......................................         920        1,000
Interest paid on deposits and funds borrowed ...........       8,434        8,342
</TABLE>

See notes to unaudited consolidated financial statements

                                       3
<PAGE>

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


NOTE 1 - PRINCIPLES OF CONSOLIDATION

         The audited and unaudited  consolidated  financial statements contained
         herein  for the  periods  prior to July 14,  1998 are those of  Thistle
         Group  Holdings,  Inc.,  (the "Mid-Tier  Holding  Company"),  which was
         organized  for the  purpose  of  holding  all of the  capital  stock of
         Roxborough-Manayunk  Bank  (the  "Bank").  The  unaudited  consolidated
         statements contained herein for the periods subsequent to July 14, 1998
         are those of Thistle  Group  Holdings,  Co., (the  "Company"),  and its
         subsidiary,  the  Bank,  which was  organized  in March of 1998 for the
         purpose of  holding  all of the  capital  stock of the Bank in order to
         facilitate the Conversion and Reorganization. The Company's business is
         conducted  principally  through the Bank. All significant  intercompany
         accounts and transactions  have been eliminated in  consolidation.  See
         also Note 3 - Conversion and Reorganization.

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 period ended  September 30, 1998 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 Registration Statement on Form S-1 dated May
         14, 1998 (File No. 333-48749).

NOTE 3 - CONVERSION AND REORGANIZATION

         On July 14, 1998, FJF Financial,  M.H.C. (the "Mutual Holding Company")
         completed  its  mutual  to  stock   conversion  (the   "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 Mid-Tier Holding Company,  other than the
         Mutual Holding  Company,  converted each share of the Mid-Tier  Holding
         Company into 5.5516 shares of common stock of Thistle  Group  Holdings,
         Co.  (the   "Exchange").   Upon   completion  of  the   Conversion  and
         Reorganization, the Mutual Holding 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 8,999,989
         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 Bank 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-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.

                                       4
<PAGE>
NOTE 4 - COMMON STOCK ACQUIRED BY THE EMPLOYEE STOCK OWNERSHIP PLAN

         As  part of the  Conversion  and  Reorganization,  the  Employee  Stock
         Ownership  Plan (the "ESOP")  borrowed  funds from the Company and used
         the funds to purchase  628,509 shares of common stock. At September 30,
         1998,  10,475  shares were  committed  to be  released.  None have been
         allocated  to  participants.  The  Company  accounts  for  its  ESOP in
         accordance   with  AICPA  Statement  of  Position  93-6,  "  Employers'
         Accounting  for Employee  Stock  Ownership  Plans",  which requires the
         Company to recognize  compensation  expense  equal to the fair value of
         the ESOP shares during the periods in which they become committed to be
         released.  To the extent that the fair value of the ESOP shares differs
         from the cost of such  shares,  this  differential  will be  charged or
         credited to equity as additional  paid-in capital.  Management  expects
         the recorded  amount of expense to fluctuate as continuing  adjustments
         are  made to  reflect  changes  in the fair  value of the ESOP  shares.
         Employers with internally leveraged ESOP's, such as the Company, do not
         report the loan  receivable from the ESOP as an asset and do not report
         the ESOP debt from the  employer as a liability.  The Company  recorded
         compensation  expense  related to the ESOP of $97,548  for the  quarter
         ended September 30, 1998.

 NOTE 5 - LOANS RECEIVABLE

         Loans  receivable at September 30, 1998 and December 31, 1997 consisted
         of the following (in thousands):

                                September 30,1998      December 31,1998  
                                -----------------      ----------------
                                                      
Mortgage loans:                                       
  1-4 family residential             $ 94,784               $ 71,397
  Other dwelling units                 16,048                 16,647
Home equity lines of credit                           
  and improvement loans                 8,596                  8,210
Commercial nonmortgage loans              285                    329
Construction loans                        997                  1,693
Loans on savings accounts                 206                    243
Consumer loans                             76                    156
                                     --------               --------
                                                      
    Total loans                       120,992                 98,675
Plus: unamortized premiums                178                    101
Less:                                                 
  Net discounts on loans purchased        (32)                   (47)
  Loans in process                        (92)                  (433)
  Deferred loan fees                   (1,292)                (1,233)
  Allowance for loan losses              (757)                  (783)
                                     --------               --------
Total                                $118,997                $96,280
                                     ========                =======
                                                     
NOTE 6 - DEPOSITS

         The major types of deposits by amounts and percentages  were as follows
(in thousands):
<TABLE>
<CAPTION>
                             September 30, 1998                    December 31, 1997
                            Amount    % of Total                  Amount     % of Total

<S>                      <C>             <C>                   <C>              <C>   
NOW accounts               $16,118          6.1%                 $15,662           6.8%
Money Market accounts        9,705          3.7%                   7,687           3.3%
Passbook accounts           98,656         37.4%                  96,158          41.7%
Certificate accounts       139,551         52.8%                 111,051          48.2%
                         --------------------------------------------------------------
Total                     $264,030        100.0%                $230,558         100.0%
                         ==============================================================
</TABLE>

                                       5
<PAGE>


NOTE 7 - EARNINGS PER SHARE

          In March 1997,  the  Financial  Accounting  Standards  Board  ("FASB")
          issued Statement Of Financial  Accounting  Standards ("SFAS") No. 128.
          The Statement  establishes  Standards  for  computing  and  presenting
          earnings per share  ("EPS") and applies to entities with publicly held
          common stock or potential  common stock.  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.  Per share
          amounts for the quarter ended September 30, 1998 include earnings only
          from  July  14,  1998,  the  completion  date  of the  initial  public
          offering.   EPS  for  the  periods   prior  to  the   Conversion   and
          Reorganization have not been presented as they are not comparable.


NOTE 8 - COMPREHENSIVE INCOME

          Effective   January  1,  1998,  the  Company  adopted  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 nine  months  ended  September  30,  1998,  the  Company
          reported   other   comprehensive   income  of  $237,929  and  $529,076
          respectively,  and $292,118 and $348,885 for the same periods in 1997.
          Such increased income consisted  entirely of unrealized  gains, net of
          taxes, on available for sale securities.


NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS

          Accounting for Derivative Instruments and Hedging Activities.  In June
          1998,  the  FASB  issued  SFAS No.  133,  "Accounting  for  Derivative
          Instruments  and Hedging  Activities".  The statement is effective for
          fiscal  years  beginning  after June 15,  1999 and will not be applied
          retroactively.  The  statement  established  accounting  and reporting
          standards for derivative instruments and hedging activity and requires
          that all  derivatives  be  measured  at fair value and  recognized  as
          either assets or liabilities in the financial  statements.  Management
          of the Company is currently assessing the potential impact of SFAS No.
          133 when such statement is adopted.

                                       6
<PAGE>

                           THISTLE GROUP HOLDINGS, CO.
                     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,   and  general  market
conditions.  Thistle Group  Holdings,  Co.  undertakes no obligation to publicly
release the results of any revisions to those  forward-looking  statements which
may be made to  reflect  events or  circumstances  after  the date  hereof or to
reflect the occurrence of unanticipated events.

General

         Thistle  Group   Holdings,   Co.  (the  "Company")  is  a  Pennsylvania
Corporation  which was  organized  in March 1998 to acquire  all of the  Capital
Stock  of   Roxborough-Manayunk   Bank  (the  "Bank")  in  the   Conversion  and
Reorganization.  Thistle Group Holdings, Co. is a unitary thrift 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 Company for the three and
nine months ended  September  30, 1998 and of the Thistle Group  Holdings,  Inc.
(the "Mid-Tier Holding Company") for all other periods presented.

Comparison of Financial Condition

The  Company  had total  assets of $460.5  million  as of  September  30,  1998,
representing  an  increase  of $184.0  million or 66% from the balance of $276.6
million as of December  31, 1997.  The net  increases of $35 million in interest
bearing  deposits and  investment  securities,  $120 million in  mortgage-backed
securities,  and $24  million in loans were  funded  with $71 million of the net
proceeds from the stock offering, additional FHLB advances of $80 million and an
increase of $33 million in deposits.

Cash and cash  equivalents  increased $14.8 million or 73% from $20.1 million at
December  31,  1997 to $34.9  million at  September  30, 1998  primarily  due to
proceeds not yet deployed from the stock offering.

Investments and mortgage-backed  securities increased $140.4 million or 94% from
$149.7 million at December 31, 1997 to $290.1 million at September 30, 1998. The
increase  was  primarily  due to $60 million in current  coupon  mortgage-backed
securities  purchased in connection with wholesale leverage  transactions funded
with FHLB advances,  and purchases of $34 million and $89 million of investments
and mortgage-backed securities,  respectively, funded with the proceeds from the
stock offering, maturities and repayments.

Loans  increased $24.3 million or 25% from $97.4 million at December 31, 1997 to
$121.7  million at  September  30,  1998.  This  increase  was the result of the
purchase of a $21 million  whole loan  package  purchased  as part of a leverage
transaction and originations of $20 million,  offset by $17 million in principal
repayments.


                                       7
<PAGE>
Deposits increased $33.4 million or 15% from $230.5 million at December 31, 1997
to $264.0 million at September 30, 1998.  Certificates  of deposit  (primarily 1
year)  increased $28 million  representing  the majority of the  increase. 

FHLB  advances  increased  $80 million from $7.8 million at December 31, 1997 to
$87.8 million at September 30, 1998.  The additional  borrowings  have scheduled
maturity dates through  September 2008 and a weighted  average  interest rate of
5.4%.

Total  stockholders'  equity  increased  $72.4  million  from  $28.5  million at
December 31, 1997 to $100.9  million at September 30, 1998  primarily due to net
proceeds from the stock offering,  and net income, net of dividends declared and
paid.

Non-performing Assets

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

<TABLE>
<CAPTION>

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

             <S>                                                   <C>                 <C>  
              Total non-performing loans................           $448                $ 716
              Real estate owned.........................            175                  116
                                                                   ----                  ---
              Total non-performing assets...............           $623                $ 832
                                                                   ====                 ====
              Total non-performing loans to
                total loans.............................            .36%                 .74%
                                                                    ====                 ===
              Total non-performing assets to
                total assets............................            .14%                 .30%
                                                                    ====                 ===

              Allowance for loan loss                              $757                 $783

              Allowance for loan losses as a percentage
              of non-performing assets                              121%                  94%

              Allowance for loan losses as a percentage
              of total non-performing loans
                                                                    169%                 109%
              Allowance for loan losses as a percentage
              of total loans                                        .62%                 .80%
</TABLE>

Comparison  of Earnings for the Three and Nine Months Ended  September  30, 1998
and 1997

         Net Income.  Net income for the three and nine months  ended  September
30,  1998  increased  $351,000  or  65%  and  decreased  $1.2  million  or  42%,
respectively,  over the same  periods in 1997.  The increase for the three month
period is due to an increase  in net  interest  income  offset by  increases  in
non-interest  expense. The decrease for the nine month period is due to the $1.5
million  after  tax  gain in 1997  from the sale of two  branch  offices  offset
somewhat by an increase in net interest income.

         Total Interest  Income.  Interest income increased $1.5 million or 31%,
and  $754,000 or 5%, for the three and nine months  ended  September  30,  1998,
respectively, as compared to the same periods in 1997. The increase in the three
month  period was due to an increase of $123  million in the average  balance of
interest-earning  assets  offset by a decrease in the average  yield of 81 basis
points.  There was rate compression  during the current quarter due primarily to
the  growth  resulting  from  immediate  infusion  of  capital  from  the  stock
conversion and general market conditions. The increase for the nine month period
was  due  to  an   increase  of  $33.7   million  in  the  average   balance  of
interest-earning  assets  offset by a decrease in the average  yield of 50 basis
points.

                                       8
<PAGE>


         Total Interest Expense.  Interest expense increased $663,000 or 25% and
$383,000  or 5%,  for the  three  and nine  months  ended  September  30,  1998,
respectively, as compared to the same periods in 1997. The increase in the three
month  period was  primarily  to an  increase  of $52.5  million in the  average
balance of interest-bearing liabilities and to a lesser extent by an increase of
11 basis points in the average cost of funds. The Company borrowed an additional
$80  million  in  advances  from the FHLB with a weighted  average  rate of 5.4%
during the quarter  ended  September  30, 1998 in  connection  with a leveraging
strategy thus increasing the average balances and cost of funds.

         Net Interest Income.  Net interest income increased $890,000 or 38% and
$371,000  or 5%,  due to the  reasons  discussed  above.  In  addition,  the net
interest spread,  the difference between the average rate earned and the average
rate paid,  decreased  by 92 basis  points to 2.26%  from 3.18% for the  quarter
ended  September  30, 1998 and decreased 57 basis points to 2.61% from 3.18% for
the nine months ended September 30, 1997.

         Provision  for Losses on Loans.  The  provision for losses on loans for
the three and nine months ended  September 30, 1998 totaled $15,000 and $30,000,
respectively,  compared to $45,000  and  $90,000  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 for the three months ended  September  30,
1998 remained consistent with the quarter ended September 30, 1997. Other income
for the nine months ended  September  30, 1998  decreased  $2.2 million over the
same period of the prior year due to a non-recurring gain of $2.2 million on the
sale of two branch offices in May 1997.

         Other Expenses.  Other expenses increased $393,000 or 25% for the three
months  ended  September  30, 1998 as compared to the same period in 1997.  This
increase was  primarily  due to a $100,000  ($50,000 of which is  non-recurring)
increase in depreciation,  training,  and communication  expenses related to the
purchase and  installation  of a $1.2  million,  year 2000  compliant,  PC-based
client server system, a $22,000 increase in professional services due to SEC and
OTS  required  filings as public  company,  a $100,000  increase in salaries and
related  expenses,   and  non-recurring   charges  of  $50,000  related  to  the
termination of the Mid-Tier Holding Company.  Other expenses  increased $152,000
or 3% for the nine  months  ended  September  30,  1998 as  compared to the same
period of 1997.  This  increase  represents  an increase in the items  discussed
above with the  exception of salaries and related  expenses  which  decreased by
$100,000  as well as a decrease  in  expenses  related to  operating  two branch
offices for five months in 1997 prior to their  sale.  The  decrease in salaries
and  related   expenses  was  mainly  due  to  a  decrease  in  profit   sharing
contributions.  Contributions are based upon net income which was higher in 1997
due to the sale of the two branch offices.  Also, as of July 1998  contributions
have been suspended.

         The Company is in the process of  reviewing  the  supplemental  pension
agreement  triggered  by the death of Chairman  John F. McGill Sr. on October 6,
1998.  While  management  has not  completed  its review of the  agreement it is
believed  there will be a charge of not greater  than  $150,000  after tax taken
against  earnings in the fourth  quarter  ended  December 31, 1998 in connection
with this benefit.

         Income Tax Expense. Income tax for the three months ended September 30,
1998 increased due to the increase in earnings.  Income tax expense for the nine
months ended September 30, 1998 decreased over the same period of the prior year
due to the decrease in earnings.


                                       9
<PAGE>

Liquidity and Capital Resources

         On  September  30,  1998,  the Bank was in  compliance  with its  three
regulatory capital requirements as follows:

<TABLE>
<CAPTION>
                                                 Amount          Percent
                                                 ------          -------
                                                     (in thousands)

<S>                                            <C>               <C>   
Tangible capital.........................       $60,671           13.75%
Tangible capital requirement.............         6,615            1.50
                                                 ------           -----
Excess over requirement..................       $54,056           12.25%
                                                =======          ======

Core capital.............................       $60,671           13.75%
Core capital requirement.................        13,230            3.00
                                                 ------           -----
Excess over requirement..................       $47,441           10.75%
                                                =======           ======

Risk based capital.......................       $61,428           53.24%
Risk based capital requirement...........         9,229            8.00
                                                 ------           -----
Excess over requirement..................       $52,199           45.24%
                                                =======           ===== 
</TABLE>
                                                             
         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 nine months ended September 30, 1998, the Bank originated $20 million
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  $21  million and $149
million, respectively, during the nine month period. Other investment activities
include investment in FHLB of Pittsburgh stock,  consumer loans U.S.  government
and federal agency obligations,  equity securities of financial institutions and
capital trust securities.

         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 September  30, 1998,  the Bank had  outstanding  $87.8  million in
advances from the FHLB of Pittsburgh. These advances were obtained in connection
with  leverage  transactions  including the purchase of a $21 million whole loan
package  and $60  million  of  current  coupon  mortgage-backed  securities.  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 19.38% at
September 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 is dependent on the Bank's operating,  financing and investing activities
during any given  period.  At  September  30,  1998,  cash and cash  equivalents
totaled $34.9 million.

         The Bank  anticipates  that it will have sufficient  funds available to
meet its  current  commitments.  As of  September  30,  1998,  the Bank had $1.3
million  in  commitments  to fund  loans.  Certificates  of  deposit  which were
scheduled to mature in one year or less as of September 30, 1998 totaled  $122.5
million.  Management  believes that a significant  portion of such deposits will
remain with the Bank.

                                       10
<PAGE>

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. 

Additional Key Operating Ratios

<TABLE>
<CAPTION>
                                                            For the                               For the
                                                      Three Months Ended                     Nine Months Ended
                                                          September 30,                         September 30,
                                                          -------------                         -------------
                                                    1998(1)            1997(1)            1998(1)            1997(1)
                                                    -------            -------            -------            -------

<S>                                                 <C>                <C>                <C>               <C>  
Return on average assets.............                 .88%               .79%               .72%              1.39%
Return on average equity.............                5.30%              7.88%              5.61%             15.12%
Yield on average interest-earning assets
                                                     6.79%              7.60%              7.03%              7.53%
Cost of average interest-bearing
liabilities                                          4.53%              4.42%              4.42%              4.35%
Interest rate spread (2).............                2.26%              3.18%              2.61%              3.18%
Net interest margin..................                3.36%              3.57%              3.29%              3.51%

</TABLE>

                                                           At September 30,
                                                                 1998
                                                           ----------------

Tangible book value per share......................             $11.22

----------------
(1)      The ratios for the three and nine month period are annualized.
(2)      Interest  rate spread  represents  the  difference  between the average
         yield   on   interest-earning   assets   and   the   average   cost  of
         interest-bearing liabilities.


Year 2000

         The Company  currently  has a Year 2000 Project Plan and Review Team in
place. As recommended by the Federal Financial  Institutions  Council,  the Plan
encompasses the following phases: Awareness, Assessment, Renovation, Validation,
and  Implementation.  These  phases will  enable the Company to identify  risks,
develop an action plan, perform adequate testing and complete certification that
its  processing  systems  will be Year  2000  ready.  Execution  of the  Plan is
currently on target.

     The Company has just  completed the  Renovation  Phase which included among
other things,  changing the information  processing  system,  the most essential
system to the Bank. The  information  processing  system was purchased from Open
Solutions Incorporated,  Glastonbury, Connecticut. The system has been certified
by its vendor as Year 2000  compliant.  The system was  installed at the Bank in
late July  1998.  It is a  PC-based  client  server  system,  which,  management
believes,  will serve the Bank well beyond the Year 2000.  The total cost of the
system  was   approximately   $1.2  million  with  additional   annual  cost  of
approximately $344,000 for depreciation,  software cost, and maintenance. During
the  Renovation  Phase  the  Company   contacted  all  other  material  vendors,
suppliers,  and  customers  regarding  their Year 2000 state of  readiness.  The
Company is currently in the process of reviewing those responses.

         The Company is beginning Phase 4, Validation, which involves testing of
all internal  systems as well as testing with vendors.  The Validation  Phase is
targeted for  completion in June 1999.  The  Implementation  Phase is to 

                                       11
<PAGE>
certify that  systems are Year 2000 ready,  along with  assurances  that any new
systems are compliant on a  going-forward  basis.  The  Implementation  Phase is
targeted for  completion  by December  1999.  No assurance can be given that the
Year 2000 Project Plan will be completed successfully by the Year 2000, in which
event  the  Company  could  incur  significant  costs.  If the  provider  of the
information  processing system is unable to resolve a potential problem in time,
the  Company  would  likely  experience   significant  data  processing  delays,
mistakes,  or  failures.  These  delays,  mistakes,  or  failures  could  have a
significant adverse impact on the financial statements of the Company.

         Successful and timely completion of the Year 2000 Project Plan is based
on  management's  best  estimates  derived  from various  assumptions  of future
events,  which are inherently  uncertain,  including the progress and results of
the Company's testing plans, and all vendors, suppliers and customer readiness.

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 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 1-4 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 September 30, 1998, the Bank's savings
accounts,  checking  accounts and money market deposit  accounts  totaled $124.5
million or 47 % 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.

                                       12

<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 September  30, 1998.  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 September
          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

         NOT APPLICABLE

ITEM 5.  OTHER MATERIALLY IMPORTANT EVENTS

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

          In October  1998,  William A. Lamb Sr. was  appointed to fill the seat
          left vacant  when John F.  McGill Sr.  passed away on October 6, 1998.
          Mr. Lamb serves as a Board member  Roxborough-Manayunk  Bank. Jerry A.
          Naessens,  current  Board  member of the Company  and Chief  Financial
          Officer of Roxborough-Manayunk Bank was appointed to fill Mr. McGill's
          Board seat at Roxborough-Manayunk Bank.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits - see attached

          (b)  Reports on Form 8-K.

               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. See also
               Note 3 to Unaudited  Consolidated  Financial Information included
               in this Form 10Q.

       3(i)    Articles of Incorporation of Thistle Group Holdings, Co.*
               
       3(ii)    Bylaws of Thistle Group Holdings, Co.*
               
       4       Specimen Stock Certificate of Thistle Group Holdings, Co.*
               
       10.1    1992 Stock  Option Plan of  Roxborough-Manayunk  Federal  Savings
               Bank*
               
       10.2    1992 Management Stock Bonus Plan of  Roxborough-Manayunk  Federal
               Savings Bank*
               
       10.3    1994 Stock  Option Plan of  Roxborough-Manayunk  Federal  Savings
               Bank*
               
       10.4    1994 Management Stock Bonus Plan of  Roxborough-Manayunk  Federal
               Savings Bank*
               
       10.5    Employment Agreement with John F. McGill*
               
       10.6    Employment Agreement with Jerry Naessens*
               
       10.7    Employment Agreement with John F. McGill, Jr.*
               
 -------------------
*    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).
                                       13
                                      
<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: November 13, 1998           By:      /s/ John F. McGill, Jr.
                                           -------------------------------------
                                           John F. McGill, Jr.
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)



Date: November 13, 1998           By:      /s/ Jerry Naessens
                                           -------------------------------------
                                           Jerry Naessens
                                           Chief Financial Officer and Secretary
                                           (Principal Officer)