UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K



              Annual Report Pursuant to Section 13 or 15(d)
                  of the Securities Exchange Act of 1934

                      For the Year Ended December 31, 2001

                        Commission File Number - 1-12070

                          TRANSFINANCIAL HOLDINGS, INC.

                    State of Incorporation - Delaware
               IRS Employer Identification No. - 46-0278762

            8245 Nieman Road, Suite 100, Lenexa, Kansas 66214
                        Telephone Number - (913) 859-0055

        Securities Registered Pursuant to Section 12(b) of the Act

                                               Name of Each Exchange
       Title of Each Class                      on Which Registered
-------------------------------                 -------------------
TransFinancial Holdings, Inc. Common Stock,   American Stock Exchange
   par value $0.01 per share,

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

Indicate by check mark if  disclosure  of  delinquent  filers  pursuant to
Item  405 of  Regulation  S-K is not  contained  herein,  and  will not be
contained,  to the best of registrant's  knowledge, in definitive proxy or
information  statements  incorporated  by  reference  in Part  III of this
Form 10-K or any amendment to this Form 10-K. [X]

The  aggregate  market  value of the  Common  Stock  held by  non-affiliates  of
TransFinancial  Holdings, Inc. as of March 30, 2002, was $7,439,214 based on the
last sale price on the American Stock Exchange prior to that date.

The number of outstanding  shares of the  registrant's  common stock as of March
30, 2002 was 3,288,291 shares.

                                       1
<PAGE>



                           Forward-Looking Statements

      The Company believes certain statements contained in this Annual Report on
Form  10-K  that  are  not   statements  of  historical   fact  may   constitute
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934.  These  statements  can often be  identified by the use in
such statements of forward-looking  terminology,  such as "believes," "expects,"
"may,"  "will,"  "should,"   "could,"   "intends,"   "plans,"   "estimates,"  or
"anticipates," or the negative thereof,  or comparable  terminology.  Certain of
the forward-looking  statements contained herein are marked by an asterisk ("*")
or otherwise specifically  identified herein. These statements involve risks and
uncertainties  that may cause actual results to differ  materially from those in
such statements.  See Item 7 "Management's  Discussion and Analysis of Financial
Condition and Results of Operations - Forward-Looking Statements" for additional
information and factors to be considered concerning forward-looking statements.

                                     PART I

Item 1. Business.

      TransFinancial  Holdings,  Inc.  ("TransFinancial"  or the "Company"),  is
headquartered  in Lenexa,  Kansas,  and is a Delaware  holding company formed in
April 1976.  At December  31,  2001,  TransFinancial  operated in the  financial
services industry. The company discontinued its transportation operations during
2000.  Financial  information about the Company's operating industry segments is
presented in Note 1 of Notes to Consolidated Financial Statements.  On September
14, 2001, the Board of Directors unanimously approved a plan of liquidation.  On
January 22, 2002,  shareholders approved the plan of complete liquidation of the
Company  and the  sale of the  financial  services  operations.  The  terms  and
conditions of the sale of the financial services operations are described in the
Company's proxy statement dated November 29, 2001 and the exhibits thereto.  The
sale  of the  financial  services  operations  is  subject  to  bank  and  state
regulatory  approval.  The  Company  expects to close the sale of the  financial
services  operations in the second quarter of 2002*. Upon closure of the sale of
the financial services operations,  the Company intends to file a Certificate of
Dissolution*.  The Company will then sell all of its remaining assets and, after
paying off its debts and setting aside required  reserves,  will  distribute the
remaining proceeds as one or more liquidating dividends.

                             DISCONTINUED OPERATIONS

      TransFinancial  discontinued  its  transportation  operations in 2000. The
Company's subsidiary, TFH Logistics & Transportation Services, Inc. ("TFH L&T"),
which is a holding company for the Company's  transportation  subsidiaries,  has
two  principal  subsidiaries,  Crouse  Cartage  Company  ("Crouse"),  which  was
acquired in 1991, and Specialized  Transport,  Inc.  ("Specialized"),  formed in
1999.

      On  September  16, 2000 and December  16,  2000,  Crouse and  Specialized,
respectively,  ceased  operations;  Crouse as a result of significant  operating
losses and cash flow  deficiency  and  Specialized  as a result of its insurance
carrier revoking its coverage.  These companies  liquidated outside  bankruptcy,
with the advice of independent  advisory  committees of creditors,  and followed
the general processes and procedures  defined under the federal bankruptcy code.
The Company has  essentially  completed the orderly  liquidations  of Crouse and
Specialized*.  The proceeds of asset  liquidations  have allowed full payment of
secured claims and a partial  distribution to priority creditors.  The financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.* See Note 2 to the Notes to Consolidated Financial Statements.

      Crouse,  headquartered  in Kansas,  was a regional motor common carrier of
general  commodities in  less-than-truckload  ("LTL") quantities in 15 states in
the north central and mid-west  portion of the United States.  LTL shipments are
defined as shipments weighing less than 20,000 pounds.

      Specialized,  headquartered in Lenexa, Kansas offered motor common carrier
service for truckload  ("TL")  quantities of general and perishable  commodities
throughout  the  48  contiguous   United  States.  TL  shipments  are  generally
transported in one movement from origin to destination.

      The loss from discontinued operations for the year ended December 31, 2000
was $12.9  million.  Costs of  closing  the  discontinued  operations  were $2.9
million in 2001 as compared to $9.1 million for 2000.

                                       2
<PAGE>



      Prior  to the  cessation  of  operations,  TFH L&T  and  its  subsidiaries
employed over 1,400  persons,  of whom more than 1,100 were drivers,  mechanics,
dockworkers or terminal office clerks.  The remaining  employees were engaged in
managerial,  sales  and  administrative  functions.  Approximately  75% of  such
employees,   including  primarily  drivers,   dockworkers  and  mechanics,  were
represented  by  the   International   Brotherhood  of  Teamsters,   Chauffeurs,
Warehousemen and Helpers of America  ("Teamsters  Union") or other local unions.
TFH L&T,  through its  subsidiaries  Crouse and  Specialized,  and the Teamsters
Union were parties to the National  Master  Freight  Agreement  ("NMFA"),  which
expires  on  March  31,  2003.  TFH  L&T  achieved  ratification  in 1998 of new
five-year pacts with the  International  Brotherhood of Teamsters or other local
unions  covering  substantially  all of its union  employees.  In 1999,  after a
one-day work stoppage at one of its principal  terminals,  the remaining  locals
agreed to contracts  with terms  comparable  to the national  contract.  The new
contracts  generally  provided  for all of the terms of the NMFA with a separate
addendum for wages.  Under these new contracts,  TFH L&T would have continued to
maintain  past work  rules,  practices  and  flexibility  within  its  operating
structure.

      TFH L&T, as employer signatory to the NMFA, contributed to certain pension
plans established for the benefit of employees belonging to the Teamsters Union.
Amendments  to the Employee  Retirement  Income  Security Act of 1974  ("ERISA")
pursuant to the MPPA Act  substantially  expanded the potential  liabilities  of
employers who participate in such plans. Under ERISA as amended by the MPPA Act,
an employer who contributes to a  multiemployer  pension plan and the members of
such employer's  controlled  group may be jointly and severally liable for their
proportionate share of the plan's unfunded liabilities in the event the employer
ceases to have an obligation to contribute to the plan or substantially  reduces
its  contributions  to the  plan  (i.e.,  in the  event of plan  termination  or
withdrawal by TFH L&T from the multiemployer  plans).  Claims in excess of $9.75
million  have been filed  against the Company  under the MPPA Act.  These claims
against TFH L&T, and all other  control  group  entities,  were settled with the
claimants and have been paid.


      The following table sets forth certain financial and statistical data with
respect to TFH L&T:
<TABLE>
<CAPTION>

                                2001(3)    2000(3)      1999(3)      1998(3)      1997(3)
                                -------    -------      -------      -------      -------

                            <c>     <c>         <c>           <c>          <c>
Revenue (000's)..............  $    0  $   111,445  $   149,125  $   144,592  $   126,062
Operating Income (000's).....       0     (19,831)      (6,434)        1,321        3,136
Operating Ratio (1)..........     0.0%     117.8%        104.3%        99.1%        97.5%
Number of Shipments (000's) -
   Less-than-truckload.......        0        782         1,228        1,166       1,076
   Truckload.................        0         24            23           23          31
Revenue per Hundredweight -
   Less-than-truckload.......  $  0.00 $     8.36   $      8.73  $      8.59  $     9.25
   Truckload.................     0.00       2.80          1.94         1.93        2.09
Tonnage (000's) -
   Less-than-truckload.......        0        535           757          743         570
   Truckload.................        0        533           437          440         495
Intercity Miles Operated (000's)     0     32,886        61,235       60,848      51,952
At Year-End, -
   Terminals (2).............        0          0            63           68          66
   Tractors and trucks.......        0          0           701          684         631
   Trailers..................        0        300         1,631        1,501       1,417
   Employees.................        1         11         1,440        1,338       1,287
   --------------------

</TABLE>


Notes:

(1)  Operating  ratio is the percent of  operating  expenses to operating
     revenue.
(2)  Includes owned, leased, agent and other operating locations.
(3)  Effective in 1998 the Company  prospectively  changed its classification of
     certain shipments, related tonnage and revenues between less-than-truckload
     and truckload  which affects the  comparability  of this data with 1996 and
     1997 information.  See  "Management's  Discussion and Analysis of Financial
     Condition  and Results of  Operations - Results of  Operations"  for a more
     detailed discussion of this change.


                                       3
<PAGE>











                             AMERICAN FREIGHT SYSTEM

      American  Freight  System,  Inc.  ("AFS")  was  treated as a  discontinued
operation of  TransFinancial  from 1991 through 2001. The primary  obligation of
AFS was to administer the provisions of a Joint Plan of  Reorganization  ("Joint
Plan").  As of December 31, 1994,  all unsecured  creditors  were paid an amount
equal  to 130% of their  allowed  claims,  which  was the  maximum  distribution
provided under the Joint Plan.

      In 1992 through 1994 TransFinancial  received  distributions in accordance
with the Joint Plan of $36  million.  In  addition,  AFS paid cash  dividends of
$25.0 million,  $6.8 million, $8.5 million and $9.2 million to TransFinancial on
December 28, 1994,  July 5, 1995,  July 11, 1996 and April 30, 1998.  AFS made a
final  distribution  to  TransFinancial  of  $715,000 in  December  2000.  These
proceeds were the result of the  settlement of the last open legal matter in the
AFS estate.  AFS received its "final" order from the bankruptcy court in January
2001.

      All the stock of AFS is  included  in the sale of the  financial  services
operations  as more fully  described  in the  Company's  proxy  statement  dated
November 29,2001 and the exhibits thereto.

                               FINANCIAL SERVICES

      The  Company  operates  in  financial   services   primarily  through  its
subsidiary,   Universal  Premium  Acceptance  Corporation  ("UPAC"),  which  was
acquired on March 29, 1996 and merged  operations with Agency Premium  Resource,
Inc.  ("APR"),  which was acquired May 31, 1995. On May 29, 1998,  UPAC acquired
Oxford Premium  Finance,  Inc.  ("Oxford") and merged  Oxford's  operations with
UPAC's.

      UPAC,  headquartered  in Lenexa,  Kansas,  is engaged in the  business  of
financing the payment of insurance premiums.  UPAC offers financing of insurance
premiums  primarily to commercial  purchasers of property and casualty insurance
who wish to pay their insurance premiums on an installment  basis.  Whereas some
insurance carriers require advance payment of a full year's premium, UPAC allows
the insured to spread the payment of the insurance premium over time.

      UPAC finances  insurance premiums without assuming the risk of claims loss
borne by insurance  carriers.  When  insureds  buy an  insurance  policy from an
independent  insurance agency or broker who offers  financing  through UPAC, the
insureds  generally  pay a down  payment of 20% to 25% of the total  premium and
sign a premium finance agreement for the balance,  which is generally payable in
installments over the following nine months.  Under the terms of UPAC's standard
form of  financing  contract,  UPAC is given the power to cancel  the  insurance
policies if there is a default in the payment on the  finance  contracts  and to
collect the unearned  portion of the premiums  from the insurance  carrier.  The
down  payments  are  usually  set  at  a  level  determined,  in  the  event  of
cancellation of a policy,  such that the unearned premiums returned by insurance
carriers are generally expected to be sufficient to cover the loan balances plus
interest and other charges due to UPAC.

      UPAC  currently does business with more than 2,200  insurance  agencies or
brokers,  the largest of which referred  approximately  3% of the total premiums
financed by UPAC in 2001. The following  table sets forth certain  financial and
operating data with respect to UPAC since 1997:

                              2001       2000       1999       1998      1997
                            ---------   --------   --------   --------  --------
Premiums financed (000's)   $ 245,965   $201,338   $190,582   $160,773  $122,981

      UPAC had 58 employees at December 31, 2001.


                                       4
<PAGE>



                                   Regulation

      UPAC's  operations  are  governed  by  state  statutes,   and  regulations
promulgated  thereunder,  which provide for the  licensing,  administration  and
supervision of premium finance  companies.  Such statutes and regulations impose
significant  restrictions on the operation of UPAC's business. The Federal Truth
in  Lending  statute  also  governs a portion  of the  format of UPAC's  premium
finance agreements.

      UPAC currently  operates as an insurance premium finance company in the 48
contiguous  states under state  licenses it holds or under  foreign  corporation
qualification  in states  that do not require  licensing  of  insurance  premium
finance companies. UPAC generally must renew its licenses annually. UPAC is also
subject to periodic  examinations and  investigations by state  regulators.  The
licensing  agency for  insurance  premium  finance  companies is  generally  the
banking department or the insurance department of the applicable state.

      State  statutes  and  regulations  impose  minimum  capital  requirements,
require  surety bonds,  govern the form and content of financing  agreements and
limit the interest  and service  charges UPAC may impose.  State  statutes  also
prescribe  notice periods prior to the cancellation of policies for non-payment,
limit   delinquency  and  collection   charges  and  govern  the  procedure  for
cancellation  of policies and collection of unearned  premiums.  In the event of
cancellation,  after  deducting all  interest,  service and late charges due it,
UPAC must, under applicable state laws, refund the surplus unearned premium,  if
any, to the insureds.

      Changes in the  regulation of UPAC's  activities,  such as increased  rate
regulation,  could have an adverse effect on its operations. The statutes do not
provide for automatic  adjustments  in the rates a premium  finance  company may
charge. Consequently, during periods of high or rising prevailing interest rates
on  institutional  indebtedness  and fixed statutory  ceilings on rates UPAC may
charge its insureds,  UPAC's  ability to operate  profitably  could be adversely
affected.*

                                   Competition

      UPAC encounters intense  competition from numerous other firms,  including
insurance  carriers  offering   installment  payment  plans,  finance  companies
affiliated  with insurance  carriers,  independent  insurance  brokers who offer
premium finance services,  banks and other lending institutions.  Many of UPAC's
competitors  are larger and have greater  financial and other  resources and are
better known to insurance agencies and brokers than UPAC. In addition, there are
few, if any, barriers to entry in the event other firms,  particularly insurance
carriers and their affiliates, seek to compete in this market.

      The market for premium finance  companies is three-tiered.  The first tier
is that of large,  national  premium finance  companies owned by large insurance
companies, banks, or commercial finance companies, all with access to lower cost
sources of funds. This group is composed of a small number of companies that, on
a combined basis,  finance a substantial portion of the total market. The second
tier,  which includes UPAC, is composed of smaller regional and national premium
finance  companies.  The third tier is composed of numerous  small local premium
finance companies.

      Competition to provide premium financing to insureds is based primarily on
interest rates,  level of service to the agencies and insureds,  and flexibility
of terms for down payment and number of payments.


Item 2. Properties.

      TransFinancial's,  TFH L&T's, and UPAC's corporate  offices are located in
approximately  10,000 square feet of a 24,000 square foot office  building owned
by the Company at 8245 Nieman Road,  Lenexa,  Kansas 66214. The remainder of the
space is available  for lease to third party  tenants.  This office  building is
included  in the  sale  of the  financial  services  operations  as  more  fully
described  in the  Company's  proxy  statement  dated  November  29,2001 and the
exhibits thereto.


                                       5

<PAGE>




Item 3.    Legal Proceedings.

      TransFinancial's operating subsidiaries are parties to routine litigation.
TransFinancial  and its subsidiaries  maintain insurance programs and accrue for
expected  losses in amounts  designed to cover  liability  resulting  from these
claims. In the opinion of management,  the outcome of such claims and litigation
will not  materially  affect  the  Company's  financial  position  or results of
operations.*

           The  Company and its  directors  have been named as  defendants  in a
lawsuit  filed on January 12, 2000 in the Chancery  Court in New Castle  County,
Delaware. The suit seeks declaratory,  injunctive and other relief relating to a
proposed  management buyout of the Company.  The suit alleges that the directors
of the Company  failed to seek  bidders for the  Company's  subsidiary,  Crouse,
failed to seek  bidders for its  subsidiary,  UPAC,  failed to actively  solicit
offers for the  Company,  imposed  arbitrary  time  constraints  on those making
offers and favored a  management  buyout  group's  proposal and failed to obtain
approval of the Company's  shareholders  for the sale of certain  Crouse assets.
The  suit  seeks  certification  as  a  class  action  complaint.  The  proposed
management  buyout was terminated on February 18, 2000.  The plaintiff  filed an
amended class action  complaint on August 9, 2000,  seeking damages in excess of
$4.50  per share for the  alleged  breaches  of  fiduciary  duties.  A motion to
dismiss a second amended  complaint has been filed and the Company believes this
suit  will  not have a  material  adverse  effect  on the  financial  condition,
liquidity or results of operations of the Company.*

      The Company and its  directors  have been named as defendants in a lawsuit
filed on  December  7, 2001 in the United  States  District  Court,  District of
Kansas, in Kansas City, Kansas.  The suit seeks  certification as a class action
complaint.  The suit alleges  that the transfer of the assets of Crouse  Cartage
Company (a subsidiary of TransFinancial  Holdings, Inc.) violated Section 271 of
the Delaware Code insofar as the transfer  constituted  a sale of  substantially
all the assets of the Company without shareholder  approval and alleges that the
Company only obtained approximately one-half the fair market value of the assets
for no valid business reason, when 90% could have been achieved. The Company has
filed a motion to dismiss a portion of this complaint, and intends to vigorously
defend.  The Company  believes this suit will not have a material adverse effect
on the financial condition, liquidity or results of operations of the Company.*


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

      No matters were submitted to the  shareholders  for vote during the fourth
quarter of 2001.
_______________________________________________________________________________




                                     PART II

Item 5. Market for  Registrant's  Common  Equity and  Related  Shareholder
Matters.

(a)   Market Information.

      TransFinancial's  Common  Stock is traded on the American  Stock  Exchange
under the symbol TFH. The following table shows the sales price  information for
each quarterly period of 2001 and 2000.

      2001                                           High          Low
      ----                                         --------      --------

      Fourth Quarter.......................        $ 2.69          $1.40
      Third Quarter........................          1.45           0.60
      Second Quarter.......................          1.00           0.51
      First Quarter........................          1.25           0.56


                                       6
<PAGE>




      2000                                           High          Low
      ----                                         --------      --------

      Fourth Quarter.......................       $  1.69          $0.25
      Third Quarter........................          1.88           0.44
      Second Quarter.......................          2.00           1.50
      First Quarter........................          5.50           1.31

 (b)  Holders.
                                                   Number of
                                                 Holders of Record
      Title of Class                            at December 31, 2001
      --------------                            --------------------

      Common Stock, par value $0.01 per share           1,144

(c)   Dividends.

      No cash dividends were paid during 2001 or 2000 on TransFinancial's Common
Stock. On September 14, 2001, the Board of Directors unanimously approved a plan
of liquidation for the Company. On January 22, 2002,  shareholders  approved the
Plan of Complete  Liquidation  of the Company and the sale of UPAC.  The Company
expects to close the sale of UPAC, which is subject to bank and state regulatory
approval in the first or second quarter of 2002.






Item 6.    Selected Financial Data.
                                2001      2000       1999      1998      1997
                                ----      ----       ----      ----      ----
                                   (In  Thousands,  Except Per Share Data)

Operating Revenue............   $15,663   $12,721    $12,339   $10,376   $10,026
                                =======   =======    =======   =======   =======
Income (Loss) from Continuing
    Operations...............   $ 1,651   $  (669)   $ (417)   $(2,307)  $ (718)
                                =======   ========   =======   ========  =======

Income (Loss) from Discontinued
    Operations (1)...........   $(2,894)  $(22,000)  $(7,667)  $  280    $1,818
                                ========  =========  ========  ======    =======

Net Income (Loss)............   $(1,243)  $(22,669)  $(8,084)  $(2,027)  $1,100
                                ========  =========  ========  ========  =======

Basic Earnings (Loss) per Share -
    Continuing Operations....   $  0.50   $  (0.20)  $ (0.12)  $ (0.43)  $(0.12)
    Discontinued Operations..     (0.88)     (6.71)    (2.25)     0.04     0.30
                                --------  ---------  --------  --------  -------
    Total....................   $ (0.38)  $  (6.91)  $ (2.37)  $ (0.39)  $ 0.18


Diluted Earnings (Loss) per Share -
    Continuing Operations....   $  0.50   $  (0.20)  $ (0.12)  $ (0.43)  $(0.12)
    Discontinued Operations       (0.88)     (6.71)    (2.25)     0.04     0.30
                                --------  ---------  --------  --------  -------
    Total....................   $ (0.38)  $  (6.91)  $ (2.37)  $ (0.39)  $ 0.18
                                ========  =========  ========  ========  =======

Total Assets (2).............   $113,324  $  92,837  $ 47,153  $ 56,756  $76,075
                                ========  =========  ========  ========  =======

Current Maturities
     of Long-Term Debt.......   $     --  $      --  $     --  $     --  $    --
                                ========  =========  ========  ========  =======

Long-Term Debt...............   $     --  $      --  $     --  $     --  $    --
                                ========  =========  ========  ========  =======


                                       7
<PAGE>



Cash Dividends per
    Common Share.............   $     --  $      --  $     --  $     --  $    --
                                ========  =========  ========  ========  =======

(1)  See Note 2 to the Notes to Consolidated Financial Statements.

(2)  See Note 4 to the Notes to Consolidated Financial Statements.


Item 7.    Management's  Discussion  and Analysis of  Financial  Condition
and Results of Operations.

                              RESULTS OF OPERATIONS

      At December 31, 2001,  TransFinancial  operated in the  insurance  premium
finance industry. The company discontinued its transportation  operations during
2000.

Financial Services

      2001 vs. 2000

      For  2001,  UPAC  reported  an  operating  income of $2.3  million  on net
financial service revenue of $11.3 million,  as compared to an operating loss of
$90,000 on net revenue of $7.2  million  for 2000.  The  increase  in  operating
income and net  financial  services  revenue were the result of higher  interest
spreads due to  decreases  in debt costs  resulting  from actions by the Federal
Reserve in 2001. Also, the amount financed  increased by $45 million as a result
of increases in insurance  premiums due to a hardening of the insurance  market.
In 2000, a change in gain on sale treatment of accounts receivable resulted in a
non-cash reduction of revenue of $768,000. Operating expenses increased by 22.2%
from $7.3  million in 2000 to $9.0 million in 2001,  primarily  due to salaries,
employee  benefits,  and bad debt expense.  Bad debt expense  increased from the
prior year due to increases in premium  financed,  charge offs related to monies
owed to UPAC by insurance agents, and reserves for liquidated carriers.

      UPAC  reported net income of  $1,292,000  for 2001,  not  considering  the
valuation  allowance  provided  against  consolidated  deferred  tax assets,  as
compared  to a net loss of  $186,000  for  2000,  as a result of  increased  net
financial revenue.

      2000 vs. 1999

      For 2000,  UPAC  reported an  operating  loss of $90,000 on net  financial
services revenue of $7.2 million,  as compared to operating income of $1,341,000
on net revenue of $8.3 million for 1999.  The  decrease in operating  income and
net financial  services revenue were the result of lower interest spreads due to
rising  debt  costs,  and  elimination  of gain on sale  treatment  of  accounts
receivable. The change in gain on sale treatment of accounts receivable resulted
in a non-cash reduction of revenue of $768,000.  Operating expenses increased by
4.3%  from  $7.0  million  in 1999 to $7.3  million  in 2000,  primarily  due to
professional  and  consulting  expenses  related to  refinancing  of UPAC's debt
facility.

      UPAC  reported  a net loss of  $186,000  for  2000,  not  considering  the
valuation  allowance  provided  against  consolidated  deferred  tax assets,  as
compared  to a net income of $682,000  for 1999,  as a result of  decreased  net
financial revenue and increased operating expenses.


Other

      In  2001,   Presis,  an  inactive   industrial   technology   division  of
TransFinancial,  incurred operating expenses of $31,000 as compared to operating
expenses of $38,000 in 2000 and  $212,000  in 1999.  The  decrease in  operating
expenses  in 2001  and  2000 as  compared  to 1999 is due to the  limitation  of
expenditures  to  essential  activities  related to  continued  development  and
testing of its technology. Presis engaged in no development activity in 2001.

      Other  expenses  decreased as public  company  costs were scaled backed in
2001 as compared to 2000.  Included  in general  corporate  expenses of 1999 are
approximately $380,000 of legal,  accounting and financial advisor fees incurred
in the

                                       8
<PAGE>



evaluation  of a now  terminated  proposal by certain  members of  management to
acquire all of the outstanding shares of the Company. Interest expense increased
substantially in 1999 due to borrowings on long-term debt incurred to repurchase
stock and fund operations and increases in interest rates on borrowings.

      TransFinancial's  effective income tax provision (benefit) rates for 2001,
2000 and 1999 were 2%, 0% and 6%. In 2001 and 2000,  the  Company's  income  tax
provision  (benefit) was $20,000 and ($51,000) on a pre-tax loss of $1.1 million
and $22.7 million, respectively, primarily as a result of valuation allowances.


Forward-Looking Statements

      The Company believes certain statements contained in this Annual Report on
Form  10-K  which  are  not   statements  of  historical   fact  may  constitute
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, including,  without limitation, the statements
specifically  identified  as  forward-looking  statements  in this Form 10-K. In
addition,  the Company  believes  certain  statements  in future  filings by the
Company with the  Securities  and Exchange  Commission,  in the Company's  press
releases,  and in oral  statements made by or with the approval of an authorized
executive  officer of the Company,  which are not statements of historical fact,
may  constitute  forward-looking  statements  within  the  meaning  of the  Act.
Examples  of  forward-looking  statements  include,  but are not  limited to (i)
projections  of revenues,  income or loss,  earnings or loss per share,  capital
expenditures,  the payment or  non-payment of dividends,  capital  structure and
other financial items, (ii) statements of plans and objectives of the Company or
its management or Board of Directors,  including plans or objectives relating to
the products or services of the Company,  (iii)  statements  of future  economic
performance,  and (iv)  statements  of  assumptions  underlying  the  statements
described in (i), (ii) and (iii). These forward-looking statements involve risks
and  uncertainties,  which may cause actual  results to differ  materially  from
those  anticipated  in such  statements.  The  following  discussion  identifies
certain  important  factors that could affect the Company's  actual  results and
actions and could cause such  results or actions to differ  materially  from any
forward-looking  statements  made by or on behalf of the Company  that relate to
such results or actions.  Other factors,  which are not identified herein, could
also have such an effect.




Financial Services

      Certain specific factors which may affect the Company's financial services
operation include:  the performance of financial markets and interest rates; the
performance of the insurance  industry;  competition  from other premium finance
companies  and  insurance  carriers for finance  business in the  Company's  key
operating  states;  changes  in  interest  rates in states in which the  Company
operates;  greater than expected credit losses;  the acquisition and integration
of additional premium finance operations or receivables portfolios; inability to
obtain  surety  bonds;  and the  inability  to obtain  continued  financing at a
competitive cost of funds.



Other Matters

      With respect to  statements  in Item 3 regarding the outcome of claims and
litigation,  such statements are subject to a number of risks and uncertainties,
including  without  limitation  the  difficulty of predicting the results of the
discovery process and the final resolution of ongoing claims and litigation.

      With respect to  statements  in this  Report,  which relate to the current
intentions of the Company and its  subsidiaries  or of management of the Company
and its subsidiaries, such statements are subject to change by management at any
time without notice.

      With respect to statements in "Financial Condition" regarding the adequacy
of the Company's capital  resources,  such statements are subject to a number of
risks and uncertainties including, without limitation: the ability of management
to effect operational changes to improve the future economic  performance of the
Company  (which is  dependent  in part upon the factors  described  above);  the
ability of the Company to successfully liquidate the transportation  operations,
the ability of the Company

                                       9
<PAGE>



and its  subsidiaries  to comply with the  covenants  contained in the financing
agreements; and material expenditures not currently anticipated by management.

      With respect to statements in "Financial Condition" regarding the adequacy
of the allowances for credit losses,  such statements are subject to a number of
risks and uncertainties  including,  without  limitation:  greater than expected
defaults by  customers or insurance  carriers,  fraud by insurance  agencies and
general economic conditions.

      With respect to the sale of the financial services operations, the sale is
subject to a number of conditions, including bank and state regulatory approval,
which are described in the Company's proxy statement dated November 29, 2001.


General Factors

      Certain  general  factors  that could  impact any or all of the  Company's
operations include: changes in general business and economic conditions; changes
in governmental regulation; and tax changes.

      The cautionary  statements  made pursuant to Section 21E of the Securities
Exchange Act of 1934, as amended, are made as of the date of this Report and are
subject to change.  The  cautionary  statements set forth in this Report are not
intended to cover all of the factors that may affect the Company's businesses in
the future.  Forward-looking  information  disseminated  publicly by the Company
following the date of this Report may be subject to additional factors hereafter
published by the Company.

                               FINANCIAL CONDITION

      As of December  31,  2001,  the  Company's  net  working  capital was $7.0
million,  the same as at December 31, 2000. The Company's  current ratio was 1.1
and its ratio of total liabilities to tangible net worth was 11.7 as of December
31, 2001, as compared to a current ratio of 1.1 and a ratio of total liabilities
to tangible  net worth of 8.4 as of  December  31,  2000.  Cash  generated  from
operating  activities  decreased in 2001 as compared to 2000,  due  primarily to
growth in finance accounts receivable.

      Investing  Activities - In 2001, cash was utilized to close the operations
of the transportation  entities. UPAC entered into a revolving loan agreement in
May 2000  eliminating  the off balance sheet  treatment of its finance  accounts
receivable.  This resulted in a repurchase of previously  sold finance  accounts
receivables.  The wind down of its discontinued operation,  AFS, was a source of
cash to the Company's operation as AFS distributed $.7 million in cash dividends
in 2000.

      Financing  Activities - UPAC has a revolving  loan  agreement  providing a
 $100  million  facility  based on eligible  finance  accounts  receivable.  The
 interest charge under this agreement is based on commercial  paper rates,  plus
 the lending banks program fees.

      In the first  quarter  of 1999,  the  Board of  Directors  authorized  the
repurchase of 1,030,000 shares of the Company's  common stock.  Through December
31,  1999,  a total of  683,241  shares had been  repurchased  at a cost of $2.6
million.

      As announced by the Company in a press release dated June 21, 1999,  three
TransFinancial  directors, the Company's Chairman,  Vice-Chairman and President,
presented  a proposal  to the Board of  Directors  of the  Company by which they
would agree to acquire all of the outstanding stock of the Company for $5.25 per
share in cash.  The Board of  Directors  appointed  a Special  Committee  of the
independent  directors to consider this proposal and other options.  The Special
Committee  engaged  the  general  counsel of the  Company as legal  counsel  and
engaged a financial  advisor to assist it in  evaluating  the proposal and other
strategic  options.  On October  19,  1999,  the Company  executed a  definitive
agreement  pursuant to which COLA Acquisitions,  Inc. ("COLA"),  a company newly
formed by the three TransFinancial  directors,  would acquire all of the Company
stock not owned by such  directors  for $6.03 in cash.  Effective  February  18,
2000, COLA notified the Company that its bank financing  necessary to consummate
the proposed merger had been  withdrawn.  The receipt of financing by COLA was a
condition to the  consummation of the proposed merger.  As a result,  the Merger
Agreement was terminated.

      The Company and its  directors  have been named as defendants in a lawsuit
filed on January 12, 2000 in the Chancery Court in New Castle County,  Delaware.
The suit seeks declaratory, injunctive and other relief relating to a proposed


                                       10
<PAGE>



management  buyout of the Company.  The suit  alleges that the  directors of the
Company failed to seek bidders for the Company's  subsidiary,  Crouse, failed to
seek bidders for its subsidiary, UPAC, failed to actively solicit offers for the
Company,  imposed  arbitrary time constraints on those making offers and favored
the  management  buyout  group's  proposal and failed to obtain  approval of the
Company's  shareholders  for the sale of certain Crouse  assets.  The suit seeks
certification as a class action  complaint.  The proposed  management buyout was
terminated  on February 18, 2000.  The  plaintiff  filed an amended class action
complaint  on August 9, 2000,  seeking  damages in excess of $4.50 per share for
the alleged  breaches of fiduciary  duties. A motion to dismiss a second amended
complaint  has been  filed and the  Company  believes  this suit will not have a
material  adverse  effect on the  financial  condition,  liquidity or results of
operations of the Company.*

      The Company and its  directors  have been named as defendants in a lawsuit
filed on  December  7, 2001 in the United  States  District  Court,  District of
Kansas, in Kansas City, Kansas.  The suit seeks  certification as a class action
complaint.  The suit alleges  that the transfer of the assets of Crouse  Cartage
Company (a subsidiary of TransFinancial  Holdings, Inc.) violated Section 271 of
the Delaware Code insofar as the transfer  constituted  a sale of  substantially
all the assets of the Company without shareholder  approval and alleges that the
Company only obtained approximately one-half the fair market value of the assets
for no valid business reason, when 90% could have been achieved. The Company has
filed a motion to dismiss a portion of this complaint, and intends to vigorously
defend.  The Company  believes this suit will not have a material adverse effect
on the financial condition, liquidity or results of operations of the Company.*


      The amount of the  allowance  for credit  losses is based on periodic (not
less than  quarterly)  evaluations  of the portfolios  based on historical  loss
experience,  detail account-by-account agings of the portfolios and management's
evaluation of specific accounts.  Management  believes the allowances for credit
losses are  adequate to provide for  potential  losses.*  See Note 1 of Notes to
Consolidated Financial Statements - Summary of Significant Accounting Policies -
Allowance for Credit Losses.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

     At December 31, 2001,  the Company's  primary  market risk is interest rate
risk.  Changes  in  short-term  interest  rates  could  affect the amount of the
Company's  interest expense on its variable  interest rate debt. The Company has
not obtained any  financial  instruments  for trading  purposes.  The  Company's
variable interest rate debt was $87.6 million as of December 31, 2001.

     At December 31, 2001, UPAC had a $100 million revolving loan agreement with
allowable  maturities from 1 to 270 days. The collateral under this agreement is
the company's finance accounts receivable,  which are generally fixed rate notes
and  typically  have a term of 9 months.  The interest  expense on the revolving
loan agreement is based on commercial paper rates,  plus the banks program fees.
As of December 31, 2001, UPAC had a total finance accounts receivable  portfolio
of $106.0  million.  UPAC does not currently use  derivatives,  such as interest
rate swaps,  to manage its  interest  rate risk and does not engage in any other
hedging activities.

     The  Company,  in  settlement  of joint  liability  with  its  discontinued
operations,  entered  into two  short-term  notes  each in the  amount  of $1.25
million. The Company's corporate office building serves as collateral for a note
with the Crouse's  primary lending bank, with interest at the bank's prime rate.
The proceeds  from the sale of UPAC serve as  collateral  for a note with UPAC's
acquirer. Interest on this note is paid monthly at 10%.


     The estimated impact of a hypothetical 100 basis point (one percent) change
in short-term  interest rates on the Company's  interest expense on the variable
interest  rate debt is  approximately  $462,000  and $356,000 as of December 31,
2001 and 2000,  respectively.  This hypothetical short-term interest rate change
is based on existing  business  and  economic  conditions  and assumes that UPAC
would pass the  increase in interest  rates on to its  customers  in new finance
contracts generated after the increase.*


                                       11
<PAGE>










                    This page is intentionally blank.


                                       12
<PAGE>



Item 8.    Financial Statements and Supplementary Data



                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and  Shareholders  of  TransFinancial  Holdings,
Inc.:

      We  have  audited  the   accompanying   consolidated   balance   sheet  of
TransFinancial  Holdings,  Inc. as of December 31, 2001 and 2000 and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the three  years in the period  ended  December  31,  2001.  Our audits  also
included the  financial  statement  schedule  listed in the Index at Item 14(a).
These financial  statements and schedule are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements schedule based on our audits.

      We conducted our audits in accordance  with auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of  material  misstatements.  An audit  includes  examining,  on a test
basis,  evidence  supporting  the  amounts  and  disclosures  in  the  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects,  the consolidated financial position of TransFinancial
Holdings,  Inc. as of December 31, 2001 and 2000 and the consolidated results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 2001 in  conformity  with  accounting  principles  generally
accepted in the United  States.  Also,  in our  opinion,  the related  financial
statement  schedule,   when  considered  in  relation  to  the  basic  financial
statements  taken as a whole,  presents  fairly  in all  material  respects  the
information set forth therein.

      The accompanying financial statements have been prepared assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
consolidated  financial  statements,  the Company has suffered  recurring losses
from  operations  and has  experienced  significantly  reduced  cash  flows from
operating  activities that raise substantial doubt in its ability to continue as
a going  concern.  Management's  plans  in  regard  to  these  matters  are also
described in Note 1. The  consolidated  financial  statements do not include any
adjustments that might result from the outcome of this uncertainty.


                                        WEAVER & MARTIN, LLC

Kansas City, Missouri
April 12, 2002
















                                       13

<PAGE>




              TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                       December 31
                                                 ---------------------
                                                   2001         2000
                                                 --------     --------
                                                     (In Thousands)

                    ASSETS
Current Assets
   Cash and cash equivalents...................  $  1,343     $    258
   Finance accounts receivable,
      less allowance for credit losses
      of $1,541 and $1,490 (Note 4)............   102,028       80,945
   Other current assets........................       344          753
                                                 --------     --------
      Total current assets.....................   103,715       81,956
                                                 --------     --------
Operating Property, at Cost
   Land........................................       192          339
   Structures and improvements.................     1,018        1,474
   Other operating property....................     1,030        1,083
                                                 --------     --------
                                                    2,240        2,896
   Less accumulated depreciation...............    (1,085)      (1,069)
                                                 --------     --------
      Net operating property...................     1,155        1,827
                                                 --------     --------
Intangibles, net of accumulated
  amortization (Note 1)                             8,355        8,946
Other Assets...................................        99          108
                                                 --------     --------
                                                 $113,324     $ 92,837
                                                 ========     ========
        LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
   Cash overdrafts.............................  $  1,776     $  1,161
   Accounts payable............................     5,204        2,309
   Revolving loan and other notes (Note 4).....    87,616       66,250
   Accrued payroll and fringes.................     1,002          434
   Other accrued expenses......................     1,092        1,306
   Discontinued Operations, net (Note 2).......        --        3,500
                                                 --------     --------
      Total current liabilities................    96,690       74,960
                                                 --------     --------
Deferred Income Taxes (Note 6).................        --           --
Contingencies and Commitments (Note 7).........        --           --
Shareholders' Equity (Notes 5 and 8)
   Preferred stock $0.01 par value,
      authorized 1,000,000 shares, none
      outstanding..............................        --           --
   Common stock $0.01 par value, authorized
      13,000,000 shares, issued 7,633,852
      and 7,623,852 shares.....................        76           76
   Paid-in capital.............................     6,254        6,254
   Retained earnings...........................    45,371       46,614
   Treasury stock, 4,345,561 shares, at cost...   (35,067)     (35,067)
                                                 --------     --------
      Total shareholders' equity...............    16,634       17,877
                                                 --------     --------
                                                 $113,324     $ 92,837
                                                 ========     ========


       The accompanying notes to consolidated financial statements are an
                     integral part of these balance sheets.

                                       14

<PAGE>




              TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME


                                                   Year Ended December 31
                                              -------------------------------
                                                2001       2000        1999
                                              --------    -------    --------
                                       (In Thousands, Except Per Share Amounts)


Interest and Servicing Revenue..............  $ 12,357    $ 9,742    $  9,431
Fee Revenue.................................     3,171      2,801       2,689
Other.......................................       135        178         219
                                               -------    -------    --------
      Total operating revenue...............    15,663     12,721      12,339
                                               -------    -------    --------

Operating Expenses
   Salaries, wages and employee benefits....     3,863      3,042       3,121
   Interest and securitization costs
    (Note 4)................................     4,349      5,439       3,897
   Operating supplies and expenses..........     2,487      3,136       3,153
   Provision for credit losses..............     2,400      1,366       1,193
   Insurance and claims.....................       117        178         175
   Depreciation and amortization............       770        816         893
                                               -------    -------    --------
      Total operating expenses..............    13,986     13,977      12,432
                                               -------    -------    --------

Operating Income (Loss).....................     1,677    (1,256)        (93)
                                               -------    -------    --------

Nonoperating Income (Expense)
   Interest income..........................       158         8          81
   Interest expense.........................       (55)     (123)         (3)
   Other, net...............................      (109)      651          31
                                               -------    -------    --------
      Total nonoperating income (expense)           (6)      536         109
                                               -------    -------    --------
Income (Loss) Before Income Taxes...........     1,671      (720)         16
Income Tax Provision (Benefit) (Note 6)             20       (51)        433
                                               -------    -------    --------
Income (Loss) from Continuing Operations         1,651      (669)       (417)
                                               -------    -------    --------
Discontinued Operations (Note 2)............        --   (12,900)     (7,667)
Income Tax Provision (Benefit) (Note 4).....        --          --        --
                                               -------    -------    --------
Income (Loss) from Discontinued Operations
 (Note 2)...................................        --   (12,900)     (7,667)

Loss on Closure of Discontinued Operations      (2,894)   (9,100)         --
                                               -------    -------    --------
Net Income (Loss)...........................  $ (1,243) $(22,669)   $ (8,084)
                                               =======    =======    ========

Basic and Diluted Earnings (Loss) Per
 Share of Continuing Operations.............  $   0.50  $  (0.20)   $  (0.12)
                                               =======    =======    ========
Basic and Diluted Earnings (Loss)
 Per Share of Discontinued Operations.......  $ (0.88)  $  (6.71)   $  (2.25)
                                               =======    =======    ========
Basic and Diluted Earnings (Loss) Per Share.  $ (0.38)  $ (6.91)    $  (2.37)
                                               =======    =======    ========
Basic Average Shares Outstanding............    3,282     3,278        3,415
                                               =======    =======    ========
Diluted Average Share Outstanding...........    3,287     3,506        3,425
                                               =======    =======    ========


           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.

                                       15

<PAGE>



<TABLE>
<CAPTION>
              TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                       Year Ended December 31
                                                                   -------------------------------
                                                               2001              2000           1999
                                                             --------          --------       --------
                                                                           (In Thousands)

                                                        <c>                <c>           <c>
Cash Flows From Operating Activities-
   Net Loss.............................................   $  (1,243)         $ (22,669)    $  (8,084)
   Adjustments to reconcile net loss to
   net cash generated by operating activities-
      Depreciation and amortization.....................         770                816           893
      Debt cost amortization............................         166                365           133
      Provision for credit losses.......................       2,400              1,366         1,193
      Deferred tax provision............................           0                  0           681
      Other.............................................         133                  0             0
      Net increase (decrease) from change in
      working capital items affecting operating
      activities-
        Accounts Receivable.............................     (23,483)            (3,132)       (6,219)
        Accounts Payable................................       2,893               (168)          883
        Other...........................................         763             (1,148)         (198)
        Loss from and on discontinued operations........       2,894             22,000         7,667
                                                           ---------          ---------     ---------
                                                             (14,707)            (2,570)       (3,051)
                                                           ---------          ---------     ---------
Cash Flows From Investing Activities-
   Cash from (to) discontinued operations...............      (6,394)              (613)        1,542
   Purchase of operating property.......................         (79)               (93)         (731)
   Net sales/ repurchase of accounts receivables, net             --            (63,875)        2,305
   Other................................................         284                (37)         (646)
                                                           ---------          ---------     ---------
                                                              (6,189)           (64,618)        2,470
                                                           ---------          ---------     ---------
Cash Flows From Financing Activities-
   Line of credit borrowings, net.......................      21,366             66,250             0
   Cash overdrafts......................................         615                112         1,049
   Payments to acquire treasury stock...................           0                  0        (2,603)
   Payment for fractional shares from reverse stock split          0                  0           (11)
   Other................................................           0                  8             9
                                                           ---------          ---------     ---------
                                                              21,981             66,370        (1,556)
                                                           ---------          ---------     ---------

Net Increase (Decrease) in Cash and Cash Equivalents....       1,085               (818)       (2,137)
Cash and Cash Equivalents:
   Beginning of period..................................         258              1,076         3,213
                                                           ---------          ---------     ---------
   End of period........................................   $   1,343          $     258     $   1,076
                                                           =========          =========     =========

   </TABLE>

          The accompanying notes to consolidated financial statements
                    are an integral part of these statements.



                                       16
<PAGE>




              TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                                Total
                                                                                                Share-
                                                Common   Paid-In     Retained     Treasury     holders'
                                                Stock    Capital     Earnings      Stock        Equity
                                                ------   -------     --------     --------     --------
                                                                   (In Thousands)

                                            <c>       <c>         <c>          <c>            <c>
Balance at December 31, 1998.................. $   76    $  6,090    $ 77,367     $ (32,459)     $ 51,074

Net loss......................................     --          --      (8,084)           --        (8,084)
Issuance of shares under
   Incentive Stock Plan.......................     --          14          --            (5)            9
Purchase of 2,115,422 shares
   of common stock............................     --          --          --        (2,603)       (2,603)
                                               ------    --------    --------     ---------      --------

Balance at December 31, 1999..................     76       6,104      69,283       (35,067)       40,396
                                               ------    --------    --------     ---------      --------


Net loss......................................     --          --     (22,669)           --       (22,669)
Issuance of shares under Deferred
   Compensation Arrangements..................     --         143          --            --           143
Issuance of shares under
   Incentive Stock Plan.......................     --           7          --            --             7
                                               ------    --------    --------     ---------      --------

Balance at December 31, 2000..................     76       6,254      46,614       (35,067)       17,877
                                               ------    --------    --------     ---------      --------

Net loss......................................     --          --      (1,243)           --        (1,243)
                                               ------    --------    --------     ---------      --------

Balance at December 31, 2001.................. $  76     $  6,254    $ 45,371     $ (35,067)     $ 16,634
                                               ======    ========    ========     =========      ========

</TABLE>

         The accompanying notes to consolidated financial statements are
                      an integral part of these statements.


                                       17
<PAGE>



              TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2001 and 2000


1. Summary of Significant Accounting Policies

     Principles of Consolidation - The consolidated financial statements include
TransFinancial  Holdings,  Inc. and its subsidiary  companies  ("the Company" or
"TransFinancial"). TransFinancial's principal operations include TFH Logistics &
Transportation  Services, Inc. ("TFH L&T") and its subsidiaries,  Crouse Cartage
Company ("Crouse") and Specialized Transport,  Inc.  ("Specialized")(see  Note 2
for Discontinued  Operations),  Universal Premium Acceptance Corporation and its
affiliate,  UPAC of  California,  Inc.  (together  "UPAC"),  and Presis,  L.L.C.
("Presis").  All significant  intercompany  accounts and transactions  have been
eliminated in consolidation.

      Going Concern - On September 14, 2001, the Board of Directors  unanimously
approved a plan of liquidation  for the Company.  Under the plan of liquidation,
the  Company  will sell all of its  assets,  and after  paying off its debts and
setting aside required reserves will distribute the remaining proceeds as one or
more liquidating dividends.  On January 22, 2002, shareholders approved the Plan
of Complete Liquidation of the Company and the sale of UPAC. The Company expects
to close  the  sale of  UPAC,  which is  subject  to bank and  state  regulatory
approval in the second quarter of 2002. The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

      Accounting  for  the  Impairment  of  Long-Lived   Assets  -  The  Company
periodically reviews its long-lived assets and associated  intangible assets and
has  identified no events or changes in  circumstances,  which indicate that the
carrying  amount of these  assets may not be  recoverable,  except as  described
below. When potential impairments are indicated,  impairment losses, if any, are
measured by the excess of carrying values over fair values.

     In July 2001, the FASB issued Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible Assets.  Statement 141 requires
that the purchase  method of  accounting  be used for all business  combinations
initiated  after  June  30,  2001,  as  well  as all  purchase  method  business
combinations  completed  after  June 30,  2001.  Statement  141  also  specifies
criteria  that  intangible   assets  acquired  in  a  purchase  method  business
combination  must  meet to be  recognized  and  reported  apart  from  goodwill.
Statement 142 will require that goodwill and intangible  assets with  indefinite
useful lives no longer be amortized,  but instead tested for impairment at least
annually in accordance with the provisions of Statement 142.  Statement 142 will
also require that  intangible  assets with  estimated  useful lives be amortized
over their respective estimated useful lives to their estimated residual values,
and reviewed for impairment in accordance  with FASB  Statement 121,  Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
of.

     The  Company  is  required  to  adopt  the   provisions  of  Statement  141
immediately, and Statement 142 effective January 1, 2002. Furthermore,  goodwill
and intangible assets determined to have an indefinite useful life acquired in a
purchase  business  combination  completed  after  June  30,  2001,  but  before
Statement 142 is adopted in full, will not be amortized, but will continue to be
evaluated for  impairment  in  accordance  with  appropriate  pre-Statement  142
accounting  literature.  Goodwill  and  intangible  assets  acquired in business
combinations  completed  before July 1, 2001 will  continue to be amortized  and
tested for  impairment  in accordance  with the  appropriate  pre-Statement  142
accounting literature prior to full adoption of Statement 142.

     Statement  141 will require,  upon the adoption of Statement  142, that the
Company evaluate its existing  intangible assets and goodwill that were acquired
in  prior   purchase   business   combination,   and  to  make   any   necessary
reclassifications in order to conform with the new criteria in Statement 141 for
recognition  apart from  goodwill.  Upon adoption of Statement  142, the Company
will be  required  to  reassess  the  useful  lives and  residual  values of all
intangible  assets  acquired,   and  make  any  necessary   amortization  period
adjustments by the end of the first interim period after adoption.  In addition,
to the extent an intangible  asset is identified as having an indefinite  useful
life, the Company will be required to test the  intangible  asset for impairment
in  accordance  with the  provisions  of Statement  142 within the first interim
period.  Any  impairment  loss will be measured  as of the date of adoption  and
recognized as the cumulative  effect of a change in accounting  principle in the
first interim period.



                                       18
<PAGE>




     In  connection  with  Statement  142's  transitional   goodwill  impairment
evaluation,  the Statement  will require the Company to perform an assessment of
whether  there is an  indication  that  goodwill  is  impaired as of the date of
adoption.  To accomplish this, the Company must identify its reporting units and
determine the carrying  value of each reporting unit by assigning the assets and
liabilities,  including the existing  goodwill and intangible  assets,  to those
reporting  units as o f the date of  adoption.  The Company  will have up to six
months from the date of adoption to determine  the fair value of each  reporting
unit and compare it to the carrying  amount of the reporting unit. To the extent
the carrying  amount of a reporting unit exceeds the fair value of the reporting
unit, an indication  exists that the reporting unit goodwill may be impaired and
the Company must perform the second step of the transitional impairment test. In
the  second  step,  the  Company  must  compare  the  implied  fair value of the
reporting goodwill with the carrying amount of the reporting unit goodwill, both
of which would be measured as of the date of adoption. The implied fair value of
goodwill is determined by allocating the fair value of the reporting unit to all
of the assets  (recognized  and  unrecognized)  and liabilities of the reporting
unit goodwill. This second step is required to be completed as soon as possible,
but no later than the end of the year of adoption.  Any transitional  impairment
loss will be  recognized  as the  cumulative  effect  of a change in  accounting
principle in the Company's statement of earnings.

     Based on the existing contract for sale as disclosed in the Company's proxy
statement dated November 29, 2001,  management believes the company will need to
record a goodwill  impairment charge upon the adoption of this  pronouncement in
the first quarter of 2002. The  impairment  amount is expected to amount to most
of the current unamortized intangible balance.


      Recognition of Revenue - Finance  charges on premium  finance  receivables
are recognized when earned under applicable state regulations using methods that
approximate  the  interest  method.  Recognition  of earned  finance  charges on
delinquent  accounts is suspended when it is determined that  collectibility  of
principal  and  interest is not  probable.  Interest on  delinquent  accounts is
recognized  when  collected.  Gains  on  sale of  receivables  under  the  prior
securitization  agreement was recorded when the  receivables  are sold (See Note
4). Late fees and other ancillary fees are recognized when chargeable.  Accounts
are generally charged off when deemed  uncollectible.  Recoveries of charged off
accounts are recognized when collected.


      The Company and UPAC had entered into a  securitization  agreement  with a
financial  institution  whereby  undivided  interests  in a  designated  pool of
accounts   receivable  can  be  transferred  on  an  ongoing  basis.  Under  the
securitization  agreement UPAC recognized  gains on sales of receivables.  These
gains  are  shown as  service  revenue  on the  accompanying  income  statement.
Effective May 26, 2000, the securitization agreement was assigned to and assumed
by a new financial institution.  UPAC and APR Funding amended the securitization
agreement that resulted in a discontinuation of the prior gain on sale treatment
of receivables.  This change in accounting  treatment had no effect on the total
earnings  recognized  over the term of each  finance  contract  or the cash flow
received  by UPAC on each  contract.  The  timing of  earnings  recognition  was
altered by the accounting  change.  The non-cash effect on operating revenue and
operating  income from the change in gain on sale treatment of receivables was a
negative charge to earnings of $768,000 in 2000.

      Special  Purpose Entity - APR Funding  Corporation is a 100% owned special
purpose entity  ("SPE") of UPAC. The sole purpose of APR Funding  Corporation is
to provide  credit  enhancement  to UPAC in its loan agreement used to originate
finance agreements. The SPE has been formed to provide bankruptcy remote status.
Effective May 26, 2000, all receivables and debt balances related to the SPE are
shown  on the  consolidated  financial  statements.  Prior  to  this  date,  the
receivables  were  accounted for as sold  receivables  and followed gain on sale
accounting  treatment under FAS 125,  Accounting for Transfers and Servincing of
Financial  Assets and  Extinguishment  of Liabilities.  At December 31, 1999 off
balance sheet finance receivables deemed to be sold were $63.9 million.



                                       19

<PAGE>

      Segment  Information  - The  Company has adopted  Statement  of  Financial
Accounting  Standards  ("SFAS")  No.  131,  "Disclosures  about  Segments  of an
Enterprise  and Related  Information."  The adoption of this  statement  did not
require  significant  changes in the way the Company's  segments were disclosed.
TransFinancial   operates  in  the  financial  services  industry.  The  Company
discontinued its transportation  operations during 2000. TransFinancial operates
as an insurance  premium  finance  company  through UPAC.  The Company  provides
short-term  secured  financing for  commercial and personal  insurance  premiums
through insurance  agencies  throughout the United States.  Approximately 50% of
the insurance premiums financed by UPAC are placed through insurance agencies in
California,  Illinois,  Florida,  Texas,  Missouri  and  Minnesota.  Information
regarding the Company's industry segments for the years ended December 31, 2001,
2000, and 1999 is as follows (in thousands):


<TABLE>
<CAPTION>
                                                                 Operating     Deprecitation
                                                   Operating      Income           and            Capital    Total
                                                   Revenues       (Loss)       Amortization      Additions   Assets
                                                   ---------     ---------     -------------     ---------   ------

                                       <c>      <c>           <c>          <c>                <c>         <c>
                                          2001     161.464       (23,256)     5,158              5,939       111,500

Financial Services                        2001      15,637         2,319        669                 77       111,500
                                          2000      12,686           (90)       708                 31        91,023
                                          1999      10,247         1,341        740                100        26,597
Corporate and Other                       2001          26          (642)       101                  2         1,824

                                          2000          35        (1,166)       108                 62         1,814
                                          1999         112        (1,434)       153                630        20,556

Total from Continuing Operations          2001      15,663         1,677        770                 79       113,324
                                          2000      12,721        (1,256)       816                 93        92,837
                                          1999      12,339           (93)       893                730        47,153

Transportation (Discontinued Operations)  2001          --        (2,894)         0                  0            47
                                          2000     111,445       (22,000)     3,105              3,434         8,268
                                          1999     149,125        (7,667)     4,265              5,209        29,740

Consolidated Continuing Operations        2001      15,663        (1,217)       770                 79       113,371
  and Discontinued Operations             2000     124,166       (23,256)     3,921              3,527       101,105
                                          1999     161,464        (7,760)     5,158              5,939        76,893


</TABLE>

     Depreciation - Depreciation is computed using the straight-line  method and
the following useful lives:

   Structures and Improvements.....................               19 - 39 years
   Other Operating Property.........................               2 - 10 years


     Allowance  for  Credit  Losses  -  The  allowances  for  credit  losses  is
maintained at an amount considered adequate to provide for potential losses. The
amount  of  allowance  for  credit  losses is based on  periodic  (not less than
quarterly)  evaluations of the portfolios  based on historical loss  experience,
detail  account-by-account  agings of the portfolios and management's evaluation
of specific  accounts.  The following is an analysis of changes in the allowance
for credit losses on finance accounts receivable:

                                                                  2001     2000

    Balance, beginning of year..............................    $1,490   $  870
    Provision for credit losses.............................     2,400    1,367
    Reclass provision - gain on sale accounting change......        --      567
    Charge-offs, net of recoveries of $550 and $443,
        respectively........................................    (2,349)  (1,314)
                                                                ------   ------
    Balance, at the end of year.............................    $1,541   $1,490
                                                                ======   ======



                                       20
<PAGE>




      Income Taxes - The Company  accounts for income taxes in  accordance  with
the  liability  method.  Deferred  income  taxes are  determined  based upon the
difference  between  the book  and the tax  basis of the  Company's  assets  and
liabilities. Deferred taxes are provided at the enacted tax rates expected to be
in effect when these differences reverse.

      Cash  Equivalents - The Company  considers  all highly liquid  investments
purchased  with  maturity of three  months or less to be cash  equivalents.  The
Company  maintains  cash and  cash  equivalents  with  various  major  financial
institutions.  At times such amounts may exceed the F.D.I.C. limits. The Company
believes that no significant concentration of credit risk exists with respect to
cash and cash equivalents.

      Disclosures  about Fair Value of  Financial  Instruments  - The  following
methods and  assumptions  are used to  estimate  the fair value of each class of
financial instruments:

      a.  Cash Equivalents - The carrying amount approximates fair value because
          of the short maturity of these instruments.

      b.  Finance Accounts Receivable - The carrying  amount  approximates  fair
          value because of the short maturity of these instruments.

      c.  Revolving Loan and Other Notes - The carrying amount approximates fair
          value as the debt bears interest at a variable market rate.

      Pervasiveness  of Estimates - The  preparation of financial  statements in
conformity with generally accepted accounting  principles requires management to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting periods.  Actual results could differ
from those estimates.

      Intangible  Assets  and  Accumulated  Amortization  -  Intangible  assets,
consisting primarily of goodwill and intangibles recorded in connection with the
acquisition  of insurance  premium  finance  companies,  totaled  $11,622,000 at
December 31, 2001. These intangible  assets are generally being amortized on the
straight-line  basis  over  15 -  25  years.  The  accumulated  amortization  of
intangible  assets as of December 31, 2001 was  $3,267,000.  See  discussion  of
Accounting for Long-Lived Assets in Summary of Significant  Accounting  Policies
regarding  new  impairment  rules  for  intangible  assets  effective  with 2002
financial reporting.

      Reclassifications  -  Certain  amounts  in the  accompanying  consolidated
balance  sheet for the prior period have been  reclassified  to conform with the
current period's presentations.


2.    Discontinued Operations

      On September  16,  2000,  the Company  ceased  operations  of Crouse,  its
less-than-truckload  motor  carrier  subsidiary,  as a result of its  continuing
operating losses. The Company continued to operate Specialized  Transport,  Inc.
("Specialized"), its truckload motor carrier subsidiary until December 16, 2000.
Prior to Crouse's  closure,  approximately  33% of  Specialized's  revenues were
received from Crouse for providing  linehaul  transportation  between terminals.
Specialized  was in the  process  of  securing  additional  freight  to  replace
revenues  previously  received  from Crouse when its  insurance  coverages  were
revoked and it was forced the close its operation.

      The  Company  is  conducting  orderly   liquidations  of  the  Crouse  and
Specialized assets for distribution to its secured and unsecured  creditors.  An
independent "Advisory Committee" of unsecured creditors has been formed for each
of Crouse and  Specialized to provide advice and oversight to management  during
this  liquidation  process.  Crouse  has  closed  on the bulk sale of all of its
tractors,  trailers,  other  equipment  and  real  property.  Substantially  all
collection of accounts  receivable and  liquidation of the assets of Specialized
is complete. The proceeds of asset liquidations have allowed the full payment of
the secured claims and a partial  distribution  to priority  creditors of Crouse
and, in the case of  Specialized  full payment of priority  creditors.  Proceeds
from asset  liquidation were insufficient to satisfy in excess of $17 million of
the  general   unsecured   creditors'   claims.*  All  remaining  assets  (which
approximate  $50,000) are reserved for the administrative  costs associated with
the closure of these  companies.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.*


                                       21
<PAGE>







3.    Employee Benefit Plans

UPAC Plans

      Effective June 1, 1995, the Company  established a 401(k) Savings Plan and
a Money Purchase  Pension Plan,  both of which are defined  contribution  plans.
Employees of UPAC and  TransFinancial  are eligible to  participate in the plans
after they attain age 21 and complete one year of employment.

      Participants  in the  401(k)  Savings  Plan may  defer up to 13% of annual
compensation.  The  Company  matches  50% of the  first  10%  deferred  by  each
employee.   Company  contributions  vest  after  five  years.  Company  matching
contributions  in 2001,  2000,  and 1999  were  $49,000,  $52,000  and  $70,000.
Effective January 1, 2002, the Company  contributions  vest after three years to
comply with new Federal regulations.

      Under the Money Purchase Pension Plan, the Company  contributes 7% of each
eligible  employee's annual compensation plus 5.7% of any compensation in excess
of the Social Security wage base.  Company  contributions in 2001, 2000 and 1999
were $111,000, $128,000 and $137,000.

Non-Union Pension Plan

      TFH L&T has a defined  contribution  pension plan ("the  Non-Union  Plan")
providing  for  a  mandatory  Company   contribution  of  5%  of  annual  earned
compensation of the non-union employees.  Additional discretionary contributions
may be made depending upon the profitability of TFH L&T. Any discretionary funds
contributed  to the Non-Union Plan were invested 100% in  TransFinancial  Common
Stock.  TFH L&T has taken action to terminate the Non-Union Plan effective March
31, 2001.

401(k) Plan

      Effective  January 1, 1990, TFH L&T established a salary deferral  program
under  Section  401(k)  of the  Internal  Revenue  Code.  To  date,  participant
contributions   to  the  401(k)  plan  have  not  been   matched   with  Company
contributions.  All  employees  of TFH L&T are  eligible to  participate  in the
401(k)  plan  after  they  attain  age 21 and  complete  one year of  qualifying
employment.  TFH L&T has taken action to terminate this plan effective March 31,
2001.

Stock Option Plans

      A Long-Term  Incentive  Plan adopted in 1998 ("1998  Plan")  provides that
options for shares of TransFinancial  Common Stock be granted to directors,  and
that options and other  shares may be granted to officers  and other  employees.
All such option  grants are at or above fair market  value at the date of grant.
Options granted generally become exercisable  ratably over two to five years and
remain  exercisable  for ten years  from the date of grant.  Initially,  600,000
shares were reserved for issuance  pursuant to the 1998 Plan. As of December 31,
2001, 272,900 shares were available for grant pursuant to the 1998 Plan.

      An Incentive Stock Plan was adopted in 1992 ("1992 Plan"),  which provides
that  options  for shares of  TransFinancial  Common  Stock  shall be granted to
directors, and may be granted to officers and key employees at fair market value
of the stock at the time such options are granted. Initially,  500,000 shares of
TransFinancial  common stock were  reserved  for  issuance  pursuant to the 1992
Plan.  As of December 31, 2001,  options for 126,480  shares were  available for
grant  pursuant to the 1992 Plan.  These options  generally  become  exercisable
ratably  over two to five  years and remain  exercisable  for ten years from the
date of grant.


                                       22
<PAGE>



      In each of 1995 and 1996 the  Company  granted  non-qualified  options  to
acquire  10,000  shares of common  stock to an  officer of UPAC  pursuant  to an
employment  agreement.  These options  become  exercisable  in 1998 and 1999 and
expire in 2005 and 2006.

      The  Company  follows   Accounting   Principles   Board  Opinion  No.  25,
"Accounting   for  Stock   Issued  to   Employees"   ("APB   25")  and   related
Interpretations  in accounting  for its employee  stock  options.  Under APB 25,
because the exercise  price of each of the Company's  stock  options  equals the
market  price of the  underlying  stock on the date of  grant,  no  compensation
expense is recognized.

      SFAS No. 123 "Accounting for Stock-Based  Compensation,"  requires the use
of option  valuation  models to estimate the fair value of stock options granted
and recognize  that  estimated  fair value as  compensation  expense.  Pro forma
information  regarding net income and earnings per share is required by SFAS No.
123,  and has been  determined  as if the  Company had  accounted  for its stock
options  under the fair  value  method of SFAS  No.123.  The fair value of these
options was estimated at the date of grant using a Black-Scholes  option pricing
model with the following  weighted average  assumptions for 2001, 2000 and 1999:
risk-free interest rates of 5.7%, 6.2% and 5.2%; expected life of options of 4.3
years, 4.4 years and 4.3 years;  and a volatility  factor of the expected market
price of the Company's common stock of .51 in 2001, .54 in 2000 and .36 in 1999.
The  preceding  assumptions  used as inputs to the  option  valuation  model are
highly  subjective in nature.  Changes in the subjective  input  assumptions can
materially affect the fair value estimates;  thus, in management's  opinion, the
estimated fair values  presented do not necessarily  represent a reliable single
measure of the fair value of its  employee  stock  options.  For purposes of pro
forma  disclosures,  the  estimated  fair value of the options is  amortized  to
expense over the options'  vesting  periods.  The Company's  unaudited pro forma
information follows (in thousands, except for per share amounts):

                                              2001         2000         1999
                                             --------    ---------    ----------
    Pro forma net income (loss)............  $(1,461)    $(22,846)    $(8,275)

    Pro forma basic earnings (loss)
         per share.........................  $ (0.42)    $  (6.96)    $ (2.43)



      The following  table is a summary of data regarding  stock options granted
during the three years ended December 31, 2001:
<TABLE>
<CAPTION>

                                    2001              2000                   1999
                              -----------------  -------------------  ------------------
                                       Weighted             Weighted            Weighted
                                       Average              Average             Average
                                       Exercise             Exercise            Exercise
                              Options   Price    Options     Price    Options    Price
                              -------  --------  -------    --------  -------   --------

                          <c>       <c>       <c>        <c>       <c>       <c>
Options outstanding at
   beginning of year.        681,300   $4.31     408,050    $7.33     353,150   $8.17
Granted....................        0   $0.00     345,750    $1.48      99,500   $4.26
Forfeited..................  115,250   $4.78     (71,200)   $5.61     (42,600)  $7.35
Exercised..................  0         $0.00      (1,300)   $4.41      (2,000)  $2.41
                             -------             -------              -------
Options outstanding at end
  of year..................  566,050   $4.21     681,300    $4.31     408,050   $7.33
                             =======             =======              =======
Options exercisable at end
  of year..................  418,350   $4.77     188,630    $7.63     160,520   $7.93
                             =======             =======              =======
Estimated weighted average
  fair value per share of
  options granted during
  the year.................          $0.00               $ 1.48              $1.33


</TABLE>
                                       23
<PAGE>



      The per share  exercise  prices of options  outstanding as of December 31,
2001,  ranged  from $.81 to $9.79 per  share.  The  weighted  average  remaining
contractual life of those options was 6.9 years.


     The following  table  summarizes  information  concerning  outstanding and
exercisable options as of December 31, 2001.

<TABLE>
<CAPTION>

                                         Weighted
                                         Average       Weighted
                         Number of       Remaining      Average       Number of Average    Weighted
        Range of        Outstanding     Contractual     Exercise         Exercisable       Exercise
    Exercise Prices       Options           Life         Price             Options          Price
    ---------------     -----------     -----------    ---------      -----------------    --------

                       <c>               <c>          <c>                <c>              <c>
    $0.00-$2.50           300,650           8.3          $1.49              184,250          $1.50
    $2.50-$5.50            70,000           6.5          $4.34               56,200          $4.36
    $5.50-$8.00            94,300           4.7          $7.63               91,200          $7.63
    $8.00-$10.00          101,100           5.4          $9.03               86,700          $9.01
                          -------                                           -------
                          566,050                                           418,350
</TABLE>

4.    Financing Agreements

Securitization of Receivables/Loan Agreements

      In December 1996, UPAC and  TransFinancial  entered into a  securitization
agreement whereby  undivided  interests in a designated pool of finance accounts
receivable  can be  sold on an  ongoing  basis.  Effective  May  26,  2000,  the
securitization  agreement  was  assigned  to  and  assumed  by a  new  financial
institution.  UPAC and APR Funding amended the securitization agreement with the
new financial institution increasing the maximum allowable amount of receivables
to be sold under the new  agreement  to $80 million,  extending  the term of the
agreement by five years with annual  liquidity  renewals  and  amending  certain
covenants.  On August 31, 2000, UPAC and APR Funding Corporation executed a Loan
and Security Agreement with the same financial institution under essentially the
same terms as the securitization  agreement. UPAC and APR Funding borrow under a
revolving loan  arrangement  with  maturities from 1 to 270 days. The loan bears
interest at commercial  paper rates plus program fees. On August 17, 2001,  UPAC
amended the Loan and Security Agreement to increase the facility to $100 million
under essentially the same terms as the prior agreement.

      Among other things,  the terms of the agreement require UPAC to maintain a
minimum  tangible net worth of $10.0 million plus 25% of cumulative  net income,
contain  restrictions  on the  payment of  dividends  by UPAC to  TransFinancial
without prior consent of the  financial  institution  and require the Company to
report any material adverse changes in its financial condition. The terms of the
loan  agreement  require  UPAC to  maintain a reserve at  specified  levels that
serves as collateral.

Other Notes

     The  Company,  in  settlement  of joint  liability  with  its  discontinued
operations,  entered  into two  short-term  notes  each in the  amount  of $1.25
million. The Company's corporate office building serves as collateral for a note
with the Crouse's  primary lending bank, with interest at the bank's prime rate.
The proceeds  from the sale of UPAC serve as  collateral  for a note with UPAC's
acquirer. Interest on this note is paid monthly at 10%.


5.    Common Stock and Earnings Per Share

                                       24

<PAGE>




Earnings Per Share

      Because of the Company's simple capital structure, income (loss) available
to common  shareholders is the same for the basic and diluted earnings per share
computations. Such amounts were $(1,143,000), $(22,669,000) and $(8,084,000) for
2001, 2000 and 1999.  Following is a  reconciliation  of basic weighted  average
common shares outstanding,  weighted average common shares outstanding  adjusted
for the dilutive  effects of outstanding  stock  options,  and basic and diluted
earnings per share for each of the periods  presented (in thousands,  except per
share amounts).



<TABLE>
<CAPTION>

                                       2001                2000               1999
                                  ---------------      ---------------     ---------------
                                      Per Share          Per Share           Per Share
                                  Shares  Amounts      Shares  Amounts     Shares  Amounts

                               <c>     <c>          <c>     <c>         <c>     <c>

Basic earnings (loss)
  per share...................    3,278   $(0.38)      3,278   $(6.91)     3,415   $(2.37)
                                          ======               ======                ======
Plus incremental shares
  from assumed conversion of
  stock options...............       10                    0                  10
                                  -----                -----               -----
Diluted earnings (loss)
  per share...................    3,288   $(0.38)      3,278   $(6.91)     3,425   $(2.37)
                                  =====   ======       =====   ======      =====   ======

</TABLE>

      Options to purchase  265,400 shares of common stock at an average exercise
price of $7.30 per share were  outstanding  at December 31,  2001,  but were not
included in the  computation of diluted  earnings per share because the options'
average  exercise  price was greater than the average market price of the common
shares. These options remain outstanding and expire through 2010.

Stock Repurchases

      In February  1999,  the Board of Directors  authorized  the  repurchase of
1,030,000 shares of the Company's common stock.  During 1999, a total of 683,241
shares were repurchased at a cost of approximately $2.6 million.

6.    Income Taxes

      Deferred  tax assets  (liabilities)  are  comprised  of the  following  at
December 31 (in thousands):

Deferred Tax Assets:
   Employee benefits........................................ $    200  $   835
   Claims accruals and other................................      927    2,553
   Allowance for credit losses..............................      710      809
   Net operating loss carryforwards.........................   10,476    9,130
   Alternative minimum tax and other credits................      754      754
                                                              -------  -------
Total gross deferred tax assets.............................   13,067   14,081
Less valuation allowance....................................  (12,734) (12,331)
                                                              -------  -------
Net deferred tax assets.....................................      333    1,750
                                                              -------  -------

Deferred Tax Liabilities:
   Operating property, principally
      due to differences in depreciation....................       61   (1,424)
   Amortization of intangibles..............................     (394)    (326)
                                                              -------  -------
Total gross deferred tax liabilities........................     (333)  (1,750)
                                                              -------  -------
Net deferred tax............................................  $     -  $     -
                                                              =======  =======

                                       25
<PAGE>




      In 2001 and  2000,  the  Company  assessed  the  likelihood  that all or a
portion  of its  deferred  tax assets  would not be  realized.  Such  assessment
included consideration of positive and negative factors, including the Company's
current financial  position and results of operations,  projected future taxable
income and available tax planning strategies. As a result of such assessment, it
was determined that it was more likely than not that the net deferred tax assets
will not be realized.  Therefore,  the Company recorded a valuation allowance of
$403,000 and  $9,134,000 in its deferred  income tax provision in 2001 and 2000,
respectively.

      At December 31, 2001, the Company had  approximately  $26.1 million of net
operating loss carryforwards that were available for Federal income tax purposes
and expire in 2018 through 2021. At December 31, 2001,  the Company had $754,000
of alternative minimum tax and other credit  carryforwards  available,  which do
not expire.  As noted  above,  the  carryforwards  of net  operating  losses and
alternative  minimum tax  credits  may not be  realized.  The  Internal  Revenue
Service  ("IRS") has examined the  Company's  1994 through 1996 tax returns.  In
April  1998,  the  Company  and the IRS  settled  all  issues for tax years 1994
through 1996 within the tax  reserves  that the Company  made  provision  for in
1997.

      The following is a reconciliation of the Federal statutory income tax rate
to the effective income tax provision (benefit) rate:


                                                    2001      2000      1999
                                                    ----      ----      ----
      Federal statutory income tax rate..........   (35.0)%   (35.0)%   (35.0)%
      State income tax rate, net.................    (4.5)     (4.6)     (4.7)
      Amortization of non-deductible
        acquisition intangibles..................     8.3       0.4       1.3
      Non-deductible meals and
        entertainment............................     0.5        --       1.1
      Change in valuation allowance..............    29.8      40.3      41.8
      Other......................................     2.8      (1.3)      1.2
                                                    -----     -----      ----
      Effective income tax rate..................     1.9%     (0.2)%   (29.1)%
                                                    =====     =====      ====

      The  components  of the income tax  provision  (benefit)  consisted of the
following (in thousands):

                                                 2001        2000       1999
                                               --------    --------   --------

Current:
   Federal.................................    $     --    $    (61)  $   (198)
   State...................................          20          10        (50)
                                               --------    --------   --------
      Total................................          20         (51)      (248)
                                               --------    --------   --------

Deferred:
   Federal.................................        (272)     (7,308)    (2,013)
   State...................................         (91)     (1,827)      (503)
   Change in valuation allowance...........         363       9,135      3,197
                                               --------    --------   --------
      Total................................           -           -        681
                                               --------    --------   --------

Total income tax provision (benefit).......    $     20    $    (51)  $    433
                                               ========    ========   ========


                                       26
<PAGE>



7. Contingencies and Commitments

      The  Company is party to  certain  claims  and  litigation  arising in the
ordinary course of business.  In the opinion of management,  the outcome of such
claims  and  litigation  will not  materially  affect the  Company's  results of
operations, cash flows or financial position.*

      Crouse was named as a  defendant  in two  lawsuits  arising out of a motor
vehicle  accident.  The first suit was instituted on June 16, 1999 in the United
States District Court in the Eastern District of Michigan (Northern Division) by
Kimberly  Idalski,  Personal  Representative  of the  Estate  of  Lori  Cothran,
deceased  against  Crouse.  The second suit was instituted on August 17, 1999 in
the United States District Court in the Eastern  District of Michigan  (Northern
Division) by Jeanne Cothran,  as Legal Guardian,  on behalf of Kaleb Cothran, an
infant child against Crouse.  The suits alleged that Crouse  negligently  caused
the death of Lori Cothran in a motor vehicle accident involving a Crouse driver.
These suits were settled within Crouse's insurance coverage.

      The Company and its  directors  have been named as defendants in a lawsuit
filed on January 12, 2000 in the Chancery Court in New Castle County,  Delaware.
The suit seeks  declaratory,  injunctive and other relief relating to a proposed
management  buyout of the Company.  The suit  alleges that the  directors of the
Company failed to seek bidders for the Company's  subsidiary,  Crouse, failed to
seek bidders for its subsidiary, UPAC, failed to actively solicit offers for the
Company, imposed arbitrary time constraints on those making offers and favored a
management  buyout  group's  proposal  and  failed  to  obtain  approval  of the
Company's  shareholders  for the sale of certain Crouse  assets.  The suit seeks
certification as a class action  complaint.  The proposed  management buyout was
terminated  on February 18, 2000.  The  plaintiff  filed an amended class action
complaint  on August 9, 2000,  seeking  damages in excess of $4.50 per share for
the alleged  breaches of fiduciary  duties. A motion to dismiss a second amended
complaint  has been  filed and the  Company  believes  this suit will not have a
material  adverse  effect on the  financial  condition,  liquidity or results of
operations of the Company.*

      The Company and its  directors  have been named as defendants in a lawsuit
filed on  December  7, 2001 in the United  States  District  Court,  District of
Kansas, in Kansas City, Kansas.  The suit seeks  certification as a class action
complaint.  The suit alleges  that the transfer of the assets of Crouse  Cartage
Company (a subsidiary of TransFinancial  Holdings, Inc.) violated Section 271 of
the Delaware Code insofar as the transfer  constituted  a sale of  substantially
all the assets of the Company without shareholder  approval and alleges that the
Company only obtained approximately one-half the fair market value of the assets
for no valid business reason, when 90% could have been achieved. The Company has
filed a motion to dismiss a portion of this complaint, and intends to vigorously
defend.  The Company  believes this suit will not have a material adverse effect
on the financial condition, liquidity or results of operations of the Company.*


8.  Shareholder Rights Plan

      On February 18, 1999,  the Board of Directors  authorized the amendment of
the previously  adopted  Shareholder Rights Plan by which the Board of Directors
declared a dividend  distribution of one Preferred Stock Purchase Right for each
outstanding share of TransFinancial Common Stock.

      Under the Shareholder  Rights Plan, Rights were issued on July 27, 1998 to
shareholders  of  record as of that date and will  expire in ten  years,  unless
earlier redeemed or exchanged by the Company. The distribution of Rights was not
taxable to the Company or its shareholders.

      The Rights become  exercisable only if a person or entity is an "Acquiring
Person" (as defined in the Plan) or announces a tender offer,  the  consummation
of which would  result in any person or group  becoming an  "Acquiring  Person."
Each Right  initially  entitles  the holder to purchase one  one-hundredth  of a
newly  issued  share of Series A  Preferred  Stock of the Company at an exercise
price of $50.00. If, however,  a person or group becomes an "Acquiring  Person",
each Right will  entitle  its  holder,  other than an  Acquiring  Person and its
affiliates, to purchase, at the Right's then current exercise price, a number of
shares of the Company's  common stock having a market value of twice the Right's
exercise price.

      In addition,  if after a person or group becomes an Acquiring Person,  the
Company is acquired in a merger or other business  combination  transaction,  or
sells 50% or more of its assets or earning  power,  each Right will  entitle its
holder, other


                                       27
<PAGE>



than an Acquiring  Person and its affiliates,  to purchase,  at the Right's then
current  exercise  price, a number of shares of the acquiring  company's  common
stock having a market value at the time of twice the Right's exercise price.

  Under the  Shareholder  Rights Plan,  an  "Acquiring  Person" is any person or
entity which, together with any affiliates or associates,  beneficially owns 15%
or more of the  shares of Common  Stock of the  Company  then  outstanding.  The
Shareholder  Rights Plan contains a number of exclusions  from the definition of
Acquiring  Person.  The Shareholders  Rights Plan will not apply to a Qualifying
Offer,  which is a cash  tender  offer to all  shareholders  satisfying  certain
conditions  set forth in the Plan.  The Company's  Board of Directors may redeem
the Rights at any time prior to a person or entity becoming an Acquiring Person.


9.    Related Party Transactions

  The Company has engaged  Timothy P.  O'Neil,  the former  president of TFH, as
independent  contractor  to  assist  in the  wind  down  of  the  transportation
operations  and such other  duties,  as the board of TFH may assign.  Mr. O'Neil
earned $33,900 in compensation from TFH as an independent contractor in 2001. As
part of the closure of the Crouse operations and payment of their creditors, Mr.
O'Neil  purchased a note  receivable  from Crouse for $115,000.  This note had a
remaining  principal  balance  of  approximately  $119,000.  Proceeds  from this
transaction were immediately distributed to the creditors of Crouse as a part of
the July 2001 initial  distribution.  Subsequent  to December  31, 2001,  Gordon
Headlee,  the former chief financial officer of Crouse Cartage Company, was also
engaged to assist with the wind down of the transportation operations.



10.   Subsequent Events


  The  sale  of   the  financial   services   operations  was  approved  by  the
shareholders on January 22, 2002 at the Company's annual shareholders'  meeting.
The sale of the  financial  services  operations,  which is  subject to bank and
state regulatory  approval,  is expected to occur in the second quarter of 2002.
The  shareholders  also approved a plan of  liquidation  at the January 22, 2002
meeting. Under the plan of liquidation, the Company will sell all of its assets,
and after  paying  off its debts  and  setting  aside  required  reserves,  will
distribute the remaining  proceeds as one or more "liquidating  dividends".  The
preliminary  estimates of the total distribution under the plan range from $2.50
to $3.00 per share.




                                       28
<PAGE>





                 TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
                       SUPPLEMENTAL FINANCIAL INFORMATION
                           December 31, 2000 and 1999


Summary of Quarterly Financial Information (Unaudited):


      TransFinancial's   quarterly  results  from  its  discontinued  operation,
Crouse,  as well as those of the motor  carrier  industry in general,  fluctuate
with the seasonal  changes in tonnage levels and with changes in weather related
operating conditions.  Inclement weather conditions during the winter months may
adversely affect freight shipments and increase operating costs.

      The following table sets forth selected  unaudited  financial  information
for each quarter of 2001 and 2000 (in thousands, except per share amounts).

                                                    2001
                                 -----------------------------------------------
                                First     Second    Third     Fourth   Total
                                -------   -------   -------   -------  --------
Revenue........................ $ 3,586   $ 3,881   $ 4,174   $ 4,022  $ 15,663
Operating Income (Loss)........     379       321       668       309     1,677
Nonoperating Income (Expense)..      (5)      161       (21)     (141)       (6)
Net Income (Loss)..............  (1,686)      467       632      (656)   (1,243)
Basic and Diluted Earnings
  (Loss) per Share.............   (0.51)     0.11      0.19     (0.17)    (0.38)


                                                    2000
                                 -----------------------------------------------
                                First     Second    Third     Fourth   Total
                                -------   -------   -------   -------  --------
Revenue........................ $ 3,039   $ 2,780   $ 3,323   $ 3,579  $ 12,721
Operating Income (Loss)........     (20)   (1,132)      (80)      (24)   (1,256)
Nonoperating Income (Expense)..    (228)      151       (38)      651       536
Net Income (Loss)..............  (3,598)   (3,427)  (10,551)   (5,093)  (22,669)
Basic and Diluted Earnings
  (Loss) per Share.............   (1.10)    (1.05)    (3.22)    (1.55)    (6.91)


Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosures

      On December 19, 2000, the Company  engaged the accounting firm of Weaver &
Martin to  conduct  the  audit of the 2000  consolidated  financial  statements.
Weaver & and Martin were not  engaged to perform  reviews of the second or third
quarter  filing on Form 10-Q for 2000 and no such reviews  have been  performed.
Subsequently,  Weaver & Martin were retained to perform an audit of the 1999 and
1998  consolidated   financial   statements.   Weaver  &  Martin  had  no  prior
relationship with the Company, were not consulted on accounting or audit issues,
and have not performed any consulting  work for the Company  subsequent to their
engagement.


                                       29
<PAGE>



                                    PART III


Item 10. Directors and Executive Officers of the Registrant

                            Directors of the Company

                                                                 Director
                                                                  of the
Name, Principal Occupation and                                   Company
other Directorships                                       Age     Since

William D. Cox                                            59       1991
    President  and  Chief  Executive  Officer  of the
    Company  since August  2001,  and Chairman of the
    Board of Directors  since June 1997.  Mr. Cox has
    served  as  President  of  various  family-owned,
    commercial and residential  construction and land
    development   companies   in   Wichita,   Kansas,
    currently  Applewood  Homes,  Inc.,  from 1967 to
    the present.

Harold C. Hill, Jr.                                       66       1995
    Retired  as a partner of Arthur  Andersen  LLP in
    1993.  Mr.  Hill's 35 years of service  with that
    firm  included   responsibility   as  partner  in
    charge of the transportation,  financial services
    and  government  practices  in Kansas  City,  and
    National  Technical  Coordinator  of that  firm's
    trucking industry practice group.

Roy R. Laborde                                            63       1991
    Vice  Chairman  of the Board of  Directors  since
    June  1997.  Chairman  of the Board of  Directors
    from May 1992 to June  1997.  President  of Amboy
    Grain,  Inc.,  Amboy,   Minnesota,   since  1985;
    President   and  Chief   Operating   Officer  for
    Rapidan Grain & Feed,  Rapidan,  Minnesota,  from
    1968   through   1988   and  has   continued   to
    merchandise grain for that company.

Clark D. Stewart                                          62       1997
    President and Chief  Executive  Officer of Butler
    National  Corporation,  a  publicly-held  company
    headquartered in Olathe,  Kansas, with operations
    primarily in the manufacture and  modification of
    aerospace   switching  equipment  and  management
    services  for Indian  gaming  enterprises,  since
    September 1989.


                        Executive Officers of the Company

     Name           Age            Position
----------------    ---  -----------------------------------------------

William D. Cox      59   President, Chief Executive Officer, Secretary
                         and Director

Kurt W. Huffman     43   Executive Vice President


      Information  regarding Mr.Cox is provided under "Directors of the Company"
above.

      Kurt W. Huffman has been Executive Vice President of TransFinancial  since
August 1998,  President and Chief  Executive  Officer of Presis since March 1998
and President  and Chief  Executive  Officer of UPAC since  October  1998.  From
August 1997 to March 1998 he served as Executive Vice President of Presis. Prior
to joining the Company in a management capacity in June 1997, Mr. Huffman served
as Chief Information Officer of Laidlaw Transit Services, Overland Park, Kansas,
a publicly held provider of school and municipal bus services,  from May 1993 to
February 1997.  Prior to his service with Laidlaw,  he was a senior manager with
the international accounting firm of Arthur Andersen LLP.

                                       30
<PAGE>




Section 16(a) Beneficial Ownership Reporting Compliance

      Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended (the
"Exchange Act"), requires directors, executive officers and beneficial owners of
more than ten percent of the Common Stock to file  initial  reports of ownership
and reports of changes in ownership with the Securities and Exchange  Commission
(the  "SEC") and the  American  Stock  Exchange,  and to  provide  copies to the
Company.  Based solely on a review of the copies of such reports provided to the
Company and written  representations  from the directors and executive officers,
the Company believes that all applicable Section 16(a) filing  requirements have
been met.


Item 11. Executive Compensation

Compensation Committee Interlocks and Insider Participation

     The Compensation  Committee consists exclusively of non-employee  directors
appointed by resolution of the entire Board of Directors.  William D. Cox served
as a non-employee  Chairman of the Board of Directors from the 1997 Organization
Meeting of the Board of Directors  until August 2001.  Mr. Cox accepted the role
of  president  of the  Company in August 2001 and  continues  as Chairman of the
Board of Directors.

<TABLE>
<CAPTION>
                           Summary Compensation Table

                                                                                      Long Term Compensation
                                                                                ----------------------------------
                                         Annual Compensation                          Awards               Payouts
                                       ------------------------------------     -----------------------    -------
                                                                   Other                     Securities                 All
                                                                   Annual       Restricted   Underlying                Other
                                                                   Compen-      Stock        Options/       LTIP      Compen-
Name and Principal                                                 sation       Awards         SARs        Payouts    sation
Position                         Year  Salary       Bonus ($)(3)     ($)            ($)         (#)           ($)      ($)
------------------               ----  ------       ------------   --------     ----------   ----------    -------    --------

                              <c>   <c>          <c>            <c>          <c>          <c>           <c>        <c>
William D. Cox,                  2001  $ 21,667(1)   $    -0-           -0-         $7,400          -0-        -0-    $     -0-
President, Chief
Executive Officer
and Secretary

Timothy P. O'Neil,               2001  $112,292      $    -0-           -0-             -0-         -0-        -0-    $ 558,763(2)
Former President, Chief          2000   192,500       192,500(4)        -0-             -0-     100,000        -0-       25,000(2)
Executive Officer                1999   160,680           -0-           -0-             -0-      20,000        -0-       25,000(2)
and Secretary

Kurt W. Huffman,                 2001  $151,000      $ 41,155        $7,200             -0-         -0-        -0-    $     -0-
Executive Vice President         2000   145,000         3,750         7,200             -0-      50,000        -0-          -0-
of the Company and President     1999   125,000         9,000         7,200             -0-      10,000        -0-          -0-
and Chief Executive Officer
of UPAC and Presis

</TABLE>

-------------------
(1) Mr.  Cox  is  an  "at  will"   employee   with  an  annual  salary  of
    approximately $52,000.

(2) Represents the annual insurance  premium of paid by the Company with respect
    to a split-dollar life insurance policy for the benefit of Timothy P O'Neil.
    For  a  description  of  such  arrangement  see  Employment  Agreements. The
    remaining amount for 2001 represents  severance payments to Mr. O'Neil under
    his employment agreement upon termination of his employment.

(3) Except as described herein, bonuses represent incentive compensation awarded
    on a discretionary basis based on subjective criteria.

(4) Retention  bonus paid to Mr. O'Neil for  agreeing  to stay with the  Company
    until completion of the liquidation of the transportation operations.


                                       31
<PAGE>



<TABLE>
<CAPTION>
                                  Option Grants in Last Fiscal Year

                           Individual Grants                             Potential Realizable
                  -----------------------------                         Value at Assumed Annual
                  Number of      % of Total                                Rates of Stock Price
                  Securities       Options          Exer-                    Appreciation for
                  Underlying       Granted to       cise      Expir-            Optiom Term
                   Options         Employees in     Price     ation     -----------------------
Name              Granted (#)    Fiscal Year       ($/Sh)     Date        5%($)       10%($)
----            -----------      --------------     ------    -----       -----       ------


             <c>              <c>                <c>       <c>         <c>         <c>

</TABLE>

Note: No grants were made in 2001.



    Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values

                                            Number of
                                            Securities        Value of
                                            Underlying        Unexercised
                                            Unexercised      In-the-Money
                                            Options at        Options at
                     Shares      Value      FY-End (#)         FY-End ($)
                  Acquired on  Realized     Exercisable/      Exercisable/
Name              Exercise (#)    ($)      Unexercisable     Unexercisable
------            ------------  -------    -------------     --------------

William D. Cox       --          $--        19,000/90,000    $  4,378/10,590
Timothy P. O'Neil    --           --       52,000/140,000        110,000/-0-
Kurt W. Huffman      --           --        12,000/68,000      11,000/44,000



                              EMPLOYMENT AGREEMENTS


      The Company was a party to an Employment Agreement with Timothy P. O'Neil,
President and Chief Executive  Officer of the Company through July 31, 2001. The
Employment  agreement  provided for the  employment at will of Mr. O'Neil by the
Company.  Under the Employment Agreement,  Mr. O'Neil was entitled to (a) salary
of $192,500 per year,  subject to increase by the Company from time to time, (b)
annual  incentive  compensation  of 36% of base  salary,  or  $69,300,  based on
achieving  budgeted net income  levels for the Company and an  additional  7% of
base salary, or $13,500, based on subjective criteria, (c) such stock options as
the Company shall from time to time grant  pursuant to stock option  plans,  (d)
certain additional fringe and other benefits,  including a Supplemental  Benefit
and  Collateral  Assignment  Split-Dollar  Agreement  as  described  below.  The
Employment Agreement provided that if Mr. O'Neil's employment were terminated by
the  Company  without  good  cause (as  defined in the  agreement),  he would be
entitled to his then existing base compensation and all related benefits for two
years. The Employment  Agreement also included a  non-competition  provision for
two years after  termination.  Under the  Employment  Agreement,  Mr. O'Neil was
entitled to certain payments upon termination of Mr. O'Neil's employment after a
change of control of the Company.  Mr.  O'Neil was entitled to such payments if,
within two years after such a change of control,  Mr.  O'Neil's  employment  was
terminated  other than by Mr. O'Neil for any reason other than death,  permanent
disability,  retirement  or Good  Cause (as  defined in the  agreement),  or was
terminated by Mr. O'Neil for Stated Cause (as defined in the agreement). In such
event,  Mr. O'Neil was entitled to the  following:  (i) 2.99 times Mr.  O'Neil's
average annual compensation over the three most recent years prior to the change
of control,  or such lesser period as Mr. O'Neil shall have been employed by the
Company,  excluding  any amount  which  would  constitute  an "excess  parachute
payment"  under  Section 280G of the Code,  (ii)  immediate  100% vesting of all
incentive   compensation  provided  or  to  be  provided  under  the  Employment
Agreement,  (iii) all benefits to which he would have been  entitled upon normal
retirement under the Supplemental Benefit and Collateral Assignment Split-Dollar
Agreement  described above and (iv) three years participation in certain medical
and life insurance plans of the Company. This Employment Agreement was


                                       32
<PAGE>



terminated  by the  Company  effective  August 1, 2001,  and the Company and Mr.
O'Neil mutually agreed on the amount then due thereunder.

The Company was a party to a  Supplemental  Benefit  and  Collateral  Assignment
Split-Dollar  Agreement  with Timothy P. O'Neil,  President and Chief  Executive
Officer of the Company.  Under the agreement,  the Company had agreed to pay the
premiums on a life  insurance  policy  insuring  the life of Mr.  O'Neil with an
initial death benefit of $532,968.  Mr. O'Neil had the right under the agreement
to designate the beneficiaries to whom the death benefits under the policy shall
be payable. If Mr. O'Neil's employment was terminated by the Company with cause,
Mr. O'Neil's rights under the policy shall terminate.  If Mr. O'Neil  terminated
his  employment,  Mr. O'Neil had no further  rights under the policy except that
Mr.  O'Neil  would  receive,  for each period of twelve  months from the date of
hire, an amount equal to 10% of the excess,  if any, of the cash surrender value
of the policy over the aggregate  cost of the policy  incurred by the Company in
the payment of premiums.  Upon the death of Mr. O'Neil, or the earlier surrender
or cancellation of the policy by him subsequent to his retirement, disability or
termination  without  cause,  the Company was entitled to the lesser of the cash
surrender  value of the policy and the  amount of  premiums  paid by it, and Mr.
O'Neil was entitled to the remaining  amounts  payable upon such event under the
policy.  Mr. O'Neil had the right to retire under the agreement upon  completing
ten years of employment and reaching age 50.


     The Company and UPAC are parties to an  Employment  Agreement  with Kurt W.
Huffman,  Executive Vice President of the Company, President and Chief Executive
Officer of UPAC. The Employment agreement provides for the employment at will of
Mr.  Huffman by the Company.  Under the  Employment  Agreement,  Mr.  Huffman is
entitled to (a) salary of $151,000 per year,  subject to increase by the Company
from time to time, (b) annual incentive  compensation of 36% of base salary,  or
$64,500,  based on achieving  budgeted net income  levels for the Company and an
additional 7% of base salary, or $10,750, based on subjective criteria, (c) such
stock  options as the  Company  shall from time to time grant  pursuant to stock
option plans, (d) certain  additional fringe and other benefits.  The Employment
Agreement provides that if Mr. Huffman's employment is terminated by the Company
without  good cause (as  defined in the  agreement),  he will be entitled to his
then  existing  base  compensation  and all related  benefits for two year.  The
Employment  Agreement  also  includes a  non-competition  provision for one year
after termination.  Under the Employment  Agreement,  Mr. Huffman is entitled to
certain payments upon termination of Mr. Huffman's  employment after a change of
control of the Company or UPAC.  Mr.  Huffman is entitled to such  payments  if,
within one year after such a change of  control,  Mr.  Huffman's  employment  is
terminated other than by Mr. Huffman for any reason other than death,  permanent
disability,  retirement  or Good  Cause (as  defined  in the  agreement),  or is
terminated  by Mr.  Huffman for Stated Cause (as defined in the  agreement).  In
such  event,  Mr.  Huffman  is  entitled  to the  following:  (i) 2.99 times Mr.
Huffman's average annual  compensation over the three most recent years prior to
the change of control,  excluding  any amount which would  constitute an "excess
parachute  payment" under Section 280G of the Code,  (ii) immediate 100% vesting
of all incentive  compensation  provided or to be provided  under the Employment
Agreement,  and (iii)  three  years  participation  in certain  medical and life
insurance plans of the Company.






                                       33
<PAGE>







      Item 12.Security Ownership of Certain Beneficial Owners and Management

      The following  table sets forth  information as of March 31, 2002,  unless
otherwise  indicated,  with respect to the beneficial ownership of the Company's
Common Stock by (a) persons known to the Company to be  beneficial  owners of 5%
or more of the outstanding  Common Stock,  (b) executive  officers listed in the
Summary  Compensation Table, (c) directors and nominees for director and (d) all
directors and executive officers of the Company as a group.

   Name of Beneficial Owners
Amount and
(and address of beneficial owners               Nature of
other than executive officers,                  Beneficial     Percent
directors and nominees)                         Ownership(1)   of Class
------------------------------------            ------------   --------

Timothy P. O'Neil.............................   345,340(2)       8.65%
c/o TransFinancial Holdings, Inc.
8245 Nieman Road, Suite 100
Lenexa, KS 66214

Roy R. Laborde................................   176,365(3)       4.42%
c/o TransFinancial Holdings, Inc.
8245 Nieman Road, Suite 100
Lenexa, KS 66214

William D. Cox................................    98,000(4)       2.45%
Harold C. Hill, Jr............................    15,500(5)        .39%
Clark D. Stewart..............................     8,000(6)        .20%
Kurt W. Huffman...............................    62,000(7)       1.55%
Directors and executive officers as a
   group (5 persons, including the above).....   355,865(8)      17.66%


--------------
(1)  Unless  otherwise  indicated,  each person has sole  voting and  investment
     power with respect to the shares listed.

(2)  Includes 192,000 shares subject to exercisable  outstanding  stock options.
     Does not include  9,000 shares held in various  irrevocable  trusts for the
     benefit  of Mr.  O'Neil's  children  and  over  which he has no  voting  or
     investment power.

(3)  Includes 17,150 shares subject to exercisable outstanding stock options and
     1,415 shares owned by and  registered  in the name of his wife,  over which
     they share voting power but Mrs. Laborde retains sole investment power.

(4)  Includes 19,000 shares subject to exercisable outstanding stock options.

(5)  Includes 4,500 shares in the Francile Hill Revocable  Trust.  Both Mr. Hill
     and Francile  Hill are trustees and each has shared  voting and  investment
     power. Also includes 11,000 shares subject to exercisable outstanding stock
     options.

(6)  Includes 7,000 shares subject to exercisable outstanding stock options.

(7)  Includes 32,000 shares subject to exercisable outstanding stock options.

(8)  Includes a total of 278,150 shares subject to exercisable outstanding stock
     options. The total includes shares held by Mr. O'Neil even though he was no
     longer a director or officer at March 31, 2002.


Item 13. Certain Relationships and Related Transactions


                                       34
<PAGE>

    Not  Applicable





                                     PART IV

Item 14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)1.  Financial Statements

       Included in Item 8, Part II of this Report -

       Consolidated Balance Sheets at December 31, 2001 and 2000

       Consolidated Statements of Income for the years ended  December 31, 2001,
          2000 and 1999

       Consolidated Statements of Cash Flows for the years  ended  December  31,
          2001, 2000 and 1999

       Consolidated  Statements of Shareholders'  Equity  for  the  years  ended
          December 31, 2001, 2000 and 1999

       Notes to Consolidated Financial Statements

       Supplemental Financial Information  (Unaudited)  - Summary  of  Quarterly
          Financial Information for 2001 and 2000

(a)2.  Financial Statement Schedules

       Included in Item 14, Part IV of this Report -

       Financial  Statement  Schedules for  the three  years ended  December 31,
               2001:

       Schedule II - Valuation and Qualifying Accounts

       Other  financial  statement  schedules are omitted  either because of the
       absence of the  conditions  under which they are  required or because the
       required   information  is  contained  in  the   consolidated   financial
       statements or notes thereto.




(a)3.  Exhibits

       The following exhibits have been filed as part of this report in response
       to Item 14(c) of Form 10-K.  The  management  contracts  or  compensatory
       plans or  arrangements  required  to be filed as  exhibits  to this  form
       pursuant Item 14(c) are contained in Exhibits 10(a), 10(b), 10(d), 10(u),
       10(v), 10(w), 10(x), 10(y) and 10(z).


                                       35
<PAGE>





       Exhibit No.  Exhibit Description
       -----------  ----------------------------------------------------------

            2(a)    Purchase  Agreement  dated  November  6,  2001  between  the
                    Company and Commercial Equity Group, Ltd. Filed as Exhibit B
                    to the proxy statement filed December 4, 2001.

            2(b)    Plan of  Complete  Liquidation.  Filed as  Exhibit  A to the
                    proxy statement filed December 4, 2001.

            3(a)    1998   Restated   Certificate   of   Incorporation   of  the
                    Registrant.  Filed as Exhibit 3(a) to Registrant's Quarterly
                    Report on Form 10-Q for the quarter ended June 30, 1998.

            3(b)    Restated By-Laws of the Registrant. Filed as Exhibit 3(b) to
                    Registrant's  Quarterly  Report on Form 10-Q for the quarter
                    ended September 30, 1998.

            4(a)    Specimen Certificate of the Common Stock, $.01 par value, of
                    the  Registrant.   Filed  as  Exhibit  4.3  to  Registrant's
                    Quarterly Report on Form 10-Q for the quarter ended June 30,
                    1998.

            4(b)    Certificate  of  Designations  of Series A Preferred  Stock,
                    dated July 15,  1998.  Filed as Exhibit 4.1 to  Registrant's
                    Quarterly Report on Form 10-Q for the quarter ended June 30,
                    1998.

            4(c)    First  Amended  and  Restated  Rights   Agreement,   between
                    TransFinancial  Holdings,  Inc.  and UMB Bank,  N.A.,  dated
                    March 4, 1999.  Filed as Exhibit 1 to  Registrant's  Current
                    Report on Form 8-K dated March 5, 1999.

            10(a)   Form  of   Indemnification   Agreement  with  Directors  and
                    Executive  Officers.  Filed as Exhibit 10(k) to Registrant's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1986.

            10(b)   1992  Incentive  Stock  Plan.  Filed  as  Exhibit  10(j)  to
                    Registrant's  Annual  Report on Form 10-K for the year ended
                    December 31, 1992.

            10(c)   Stock Purchase  Agreement by and between  Universal  Premium
                    Acceptance  Corporation  and Oxford Bank and Trust  Company,
                    dated April 29, 1998.  Filed as Exhibit 2(a) to Registrant's
                    Current Report on Form 8-K, dated May 29, 1998.

            10(d)   Registrant's 1998 Long-Term Incentive Plan. Filed as Exhibit
                    10(d) to  Registrant's  Annual  Report  on Form 10-K for the
                    year ended December 31, 1998.

            10(e)   Receivables  Purchase  Agreement  by and among  APR  Funding
                    Corporation,   Universal  Premium  Acceptance   Corporation,
                    Anuhco, Inc.,  EagleFunding  Capital Corporation,  The First
                    National Bank of Boston,  dated December 31, 1996.  Filed as
                    Exhibit 10(j) to Registrant's Annual Report on Form 10-K for
                    the year ended December 31, 1996.

            10(f)   Amendment  No. 4 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings,  Inc.,  EagleFunding
                    Capital  Corporation  and  BankBoston,  N.A.,  dated May 29,
                    1998. Filed as Exhibit 10(a) to Registrant's  Current Report
                    on Form 8-K, dated May 29, 1998.


            10(g)   Amendment  No. 5 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings,  Inc.,  EagleFunding
                    Capital  Corporation and BankBoston,  N.A., dated August 25,
                    1998. Filed


                                       36
<PAGE>



                    as Exhibit  10.1 to  Registrant's  Quarterly  Report on Form
                    10-Q for the quarter filed September 30, 1998.

            10(h)   Amendment  No. 6 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings,  Inc.,  EagleFunding
                    Capital  Corporation and BankBoston,  N.A.,  dated September
                    11, 1998.  Filed as Exhibit 10.2 to  Registrant's  Quarterly
                    Report  on Form 10-Q for the  quarter  ended  September  30,
                    1998.

            10(i)   Amendment  No. 7 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings,  Inc.,  EagleFunding
                    Capital  Corporation  and BankBoston,  N.A.,  dated July 14,
                    1999. Filed as Exhibit 10.1 to Registrant's Quarterly Report
                    on Form 10-Q for the quarter ended June 30, 1999.

            10(j)   Amendment  No. 8 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings,  Inc.,  EagleFunding
                    Capital  Corporation and BankBoston,  N.A., dated October 8,
                    1999. Filed as Exhibit 10.1 to Registrant's Quarterly Report
                    on Form 10-Q for the quarter ended September 30, 1999.

            10(k)   Amendment  No. 9 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings,  Inc.,  EagleFunding
                    Capital Corporation and BankBoston, N.A., dated December 29,
                    1999.

            10(l)   Amendment No. 10 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings,  Inc.,  EagleFunding
                    Capital Corporation and BankBoston, N.A., dated February 23,
                    2000.

            10(m)   Amendment No. 11 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings,  Inc.,  EagleFunding
                    Capital  Corporation and BankBoston,  N.A.,  dated April 27,
                    2000.

            10(n)   Amendment No. 12 to  Receivables  Purchase  Agreement by and
                    among APR Funding Corporation,  Universal Premium Acceptance
                    Corporation,  TransFinancial  Holdings, Inc Autobahn Funding
                    Company LLC, DG Bank Deutsche  Genossenschaftsbank AG, dated
                    May 25, 2000.

            10(o)   Receivables  Purchase  Agreement  by and among  APR  Funding
                    Corporation,   Universal  Premium  Acceptance   Corporation,
                    Autobahn    Funding    Company   LLC,   DG   Bank   Deutsche
                    Genossenschaftsbank  AG, dated  December 31, 1996 as amended
                    by Amendment Nos. 1 - 12 thereto.

           10(p)    Loan and Security  Agreement,  dated August 31, 2000,  among
                    APR  Funding   Corporation,   Universal  Premium  Acceptance
                    Corporation,  Autobahn  Funding  Company  LLC  and  DG  Bank
                    Deutsche  Genossenschaftsbank  AG.  Filed as Exhibit 10.1 to
                    Registrant's  Quarterly  Report on form 10-Q for the quarter
                    ended September 30, 2000.

            10(q)   Secured Loan Agreement by and between  Bankers Trust Company
                    of Des  Moines,  Iowa  and  Crouse  Cartage  Company,  dated
                    January 5,  1998.  Filed as  Exhibit  10(k) to  Registrant's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1997.

            10(r)   Stock  Purchase  Agreement,  dated August 14,  1998,  by and
                    between TransFinancial Holdings, Inc. and certain members of
                    the Crouse  family.  Filed as Exhibit  10.1 to  Registrant's
                    Quarterly Report on Form 10-Q for the quarter ended June 30,
                    1998.


                                     37

<PAGE>

            10(s)   Secured Loan  Agreement by and between  Bankers Trust of Des
                    Moines,  Iowa,  TransFinancial  Holdings,  Inc.,  and Crouse
                    Cartage Company, dated March 25, 1999. Filed as Exhibit 10.1
                    to  Registrant's  Quarterly  Report  on  Form  10-Q  for the
                    quarter ended March 31, 1999.

            10(t)   Amended and Restated  Secured Loan Agreement,  dated July 5,
                    2000,  by and  among  Bankers  Trust  Company,  N.A.  of Des
                    Moines, Iowa,  TransFinancial Holdings, Inc., Crouse Cartage
                    Company,  Specialized  Transport,  Inc.,  TFH  Logistics and
                    Transportation  Services,  Inc., Transport Brokerage,  Inc.,
                    Phoenix  Computer  Services,  Inc.,  Custom Client Services,
                    Inc.  and TFH  Properties,  Inc.  Filed as  Exhibit  10.1 to
                    Registrant's  Quarterly  Report on Form 10-Q for the quarter
                    ended June 30, 2000.

            10(u)   Supplemental Benefit and Collateral Assignment  Split-Dollar
                    Agreement  dated January 18, 1997 by and between the Company
                    and Timothy P. O'Neil. Filed as Exhibit 10.2 to Registrant's
                    Quarterly   Report  on  Form  10-Q  for  the  quarter  ended
                    September 30, 1999.

            10(v)   Employment  Agreement  dated July 2, 1998 by and between the
                    Company  and  Timothy P.  O'Neil.  Filed as Exhibit  10.3 to
                    Registrant's  Quarterly  Report on Form 10-Q for the quarter
                    ended September 30, 1999.

            10(w)   Supplemental  Benefit  Agreement dated September 30, 1995 by
                    and  between  the  Company  and David D.  Taggart.  Filed as
                    Exhibit 10.4 to Registrant's  Quarterly  Report on Form 10-Q
                    for the quarter ended September 30, 1999.

            10(x)   Employment  Agreement  dated April 27, 1998 by and among the
                    Company,  Crouse Cartage Company and David D. Taggart. Filed
                    as Exhibit  10.5 to  Registrant's  Quarterly  Report on Form
                    10-Q for the quarter ended September 30, 1999.

            10(y)   Agreement  dated  September  30,  1995  by and  between  the
                    Company  and  David D.  Taggart.  Filed as  Exhibit  10.6 to
                    Registrant's  Quarterly  Report on Form 10-Q for the quarter
                    ended September 30, 1999.

            10(z)   Amended and Restated Employment  Agreement dated October 16,
                    1998 by and among the Company,  Universal Premium Acceptance
                    Corporation,  Presis,  L.L.C. and Kurt W. Huffman.  Filed as
                    Exhibit 10.7 to Registrant's  Quarterly  Report on Form 10-Q
                    for the quarter ended September 30, 1999.

            10(aa)* Purchase Contract by and between R.L.R. Investments, L.L.C.,
                    an Ohio limited liability company and R.L.R. Transfer, Inc.,
                    an  Ohio   corporation   and  Crouse  Cartage   Company  and
                    TransFinancial Holdings, Inc. dated October 20, 2000.

            21*     List of all subsidiaries of  TransFinancial  Holdings,  Inc.
                    the state of incorporation of each such subsidiary,  and the
                    names under which such subsidiaries do business.

      *Filed herewith.

 (b)        Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended December 31, 2001
--------------------


                                       38
<PAGE>



<TABLE>
<CAPTION>

           TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
           Schedule II - Valuation and Qualifying Accounts


                                            Additions
                                Balance at   Charged     Charged                Balance
                                Beginning      to        to Other    Deduc-     at End
Description                      of Year     Expense     Accounts    tions(1)   of Year
-----------                     ----------  --------     --------    --------   -------
                                                      (In Thousands)

                             <c>         <c>          <c>         <c>        <c>
Allowance for credit losses
  (deducted from finance
  accounts receivable)
    Year Ended December 31 -
      2001....................  $1,490     $2,400        $ --       $  2,349    $1,541
      2000....................     870      1,367         567(2)      (1,314)    1,490
      1999....................     566      1,193          --           (889)      870

</TABLE>

-------------------------
   (1) Deduction for purposes for which reserve was created.

   (2) Reclass provision from change in gain treatment on receivables.


                                       39
<PAGE>



                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) 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.



Date:  April 12,2002           By /s/ William D. Cox
                                  ---------------------------
                                         William D. Cox,
                                         President, Chief Executive
                                         Officer and Secretary


      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.


//s/William D. Cox             President, Chief Executive Officer and Secretary
--------------------------     (Principal Financial Officer)
William D. Cox


/s/William D. Cox              /s/Roy R. Laborde
--------------------------     --------------------
William D. Cox, Chairman       Roy R. Laborde, Vice Chairman of
of the Board of Directors      the Board of Directors


/s/ Clark D. Stewart           /s/ Harold C. Hill
--------------------------     --------------------
Clark D. Stewart, Director     Harold C. Hill, Jr., Director







April 12, 2002
Date of all signatures


                                       40
<PAGE>



                 TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES

                                 Exhibit Index


Exhibit No.     Exhibit Description
-----------     -------------------

21              List of all Subsidiaries of TransFinancial Holdings, Inc.





                                       41